On July 27, 2022, the CFPB and DOJ took action to end Trident Mortgage Company’s intentional discrimination against families living in majority-minority neighborhoods in the greater Philadelphia area. The CFPB and DOJ allege Trident redlined majority-minority neighborhoods through its marketing, sales, and hiring actions. If entered by the court, the settlement would require Trident to pay a $4 million civil penalty to the CFPB for victims’ relief fund.
From CFPB Director Rohit Chopra’s statement:
“Trident illegally redlined neighborhoods in the Philadelphia area, excluding qualified families seeking to own a home. With housing costs so high, it is critical that illegal discrimination does not put homeownership even further out of reach.”
In October last year, we wrote about the DOJ launching its initiative to combat redlining and Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said that this action is a stark reminder that redlining is not a problem from a bygone era. She said in a statement,
“Trident’s unlawful redlining activity denied communities of color equal access to residential mortgages, stripped them of the opportunity to build wealth and devalued properties in their neighborhoods.”
Trident Mortgage Company was a non-depository mortgage company until it stopped accepting mortgage loan applications in 2021. According to the complaint, Trident actively discouraged applications from people living in majority-minority neighborhoods within the Philadelphia Metropolitan Statistical Area. In particular, Trident was found to have engaged in a number of problematic conducts during the investigation, including:
Distributing racist language and messages about certain neighborhoods. Trident’s loan employees received and distributed e-mails containing racial slurs and racist content as well as pejorative content specifically related to real estate properties’ locations and appraisals.
Avoiding sending its loan officers to market to majority-minority neighborhoods. 51 out 53 loan officers were assigned in majority-white neighborhoods.
Developing marketing campaigns and advertisements that discouraged and ignored minority mortgage loan applicants. Marketing activities of Trident included direct mail campaigns where both models and Trident employees appeared to be white, open house flyers were overwhelmingly concentrated in majority-white neighborhoods, and online advertisements appeared for home listings overwhelmingly located in majority-white neighborhoods.
The proposed order, if entered by the court, would be CFPB’s first nonbank mortgage redlining resolution and it would require Trident, among other things, to:
Pay $18.4 million into a loan subsidy program;
Pay a $4 million fine which will be used for the CFPB’s victims’ relief fund; and
Pay an additional $2 million for advertising in redlined areas.
Read the CFPB’s press release here.
The original complaint and proposed order can be found here.
