Consumer Bureau Takes Action Against Trustmark Bank

CFPB Alleges Bank Engaged in Redlining in Memphis

Andy Spears

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The Consumer Financial Protection Bureau (CFPB) along with the Department of Justice and Office of the Comptroller of the Currency are taking action against Trustmark National Bank for alleged redlining against Black and Hispanic neighborhoods in Memphis, TN.

The CFPB and DOJ allege that Trustmark discriminated against Black and Hispanic neighborhoods by deliberately not marketing, offering, or originating home loans to consumers in majority-Black and Hispanic neighborhoods in the Memphis metropolitan area. The CFPB and DOJ also allege that Trustmark discouraged consumers residing in or seeking credit for properties located in these neighborhoods from applying for credit.

“Trustmark purposely excluded and discriminated against Black and Hispanic communities” said CFPB Director Rohit Chopra. “The federal government will be working to rid the market of racist business practices, including those by discriminatory algorithms.”

“Lending discrimination runs counter to fundamental promises of our economic system. When people are denied credit simply because of their race or national origin, their ability to share in our nation’s prosperity is all but eliminated,” said Attorney General Garland. “Today, we are committing ourselves to addressing modern-day redlining by making far more robust use of our fair lending authorities. We will spare no resource to ensure that federal fair lending laws are vigorously enforced and that financial institutions provide equal opportunity for every American to obtain credit.”

Specific Allegations:

  • Avoided locating branches in majority-Black and Hispanic communities: From 2014 and 2018, only four of Trustmark’s 25 branches in the Memphis metropolitan area were located in majority-Black and Hispanic communities, although 50% of the census tracts in the Memphis MSA are majority-Black and Hispanic. Two of the branches were established or acquired in majority-white neighborhoods in Memphis and are only now in majority-Black and Hispanic neighborhoods because of shifting demographics. Trustmark also closed its only limited-service branch located in a majority-Black and Hispanic neighborhood in the Memphis MSA in 2015.
  • Avoided assigning loan officers to majority-Black and Hispanic communities: During the relevant time period, Trustmark did not assign a

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .