“Buckle Up For CFPB Anti-Redlining Drive”
On June 29, 2016, the Consumer Financial Protection Bureau (“CFPB”) and the Department of Justice (“DOJ”) announced a $10.6 million settlement with BancorpSouth Bank (“BancorpSouth”) based on allegations that it engaged in redlining, commonly understood as the practice of refusing to serve minority neighborhoods or charging minorities more for certain products and services.
Although the CFPB and DOJ had previously articulated their anti-redlining commitment (punctuated by the October 2015 mortgage redlining settlement with Hudson City Savings Bank, F.S.B.), the BancorpSouth case is a crucial step in the CFPB’s anti-redlining enforcement initiative under the Equal Credit Opportunity Act and Fair Housing Act.
This Stroock Special Bulletin analyzes the BancorpSouth settlement and how it reveals important insights for industry regulatory compliance and defense efforts.