The Department of Justice has announced a proposed consent order with Memphis, Tenn.-based Evolve Bank and Trust to resolve allegations of lending discrimination on the basis of race, sex and national origin in the pricing of residential mortgage loans.
Specifically, DOJ alleged that from at least 2014 through 2019 Evolve charged Black, Hispanic, and female borrowers statistically significant higher amounts in discretionary pricing components than non-Hispanic white and male borrowers, resulting in Black and Hispanic borrowers paying more for their mortgage loans than similarly situated white borrowers, and female borrowers paying more than similarly situated male borrowers.
Pursuant to the settlement, Evolve Bank must establish a settlement fund of $1.3 million to compensate affected borrowers, and must also pay a $50,000 civil penalty. The proposed consent order also required Evolve Bank – for four years – to maintain policies that reduce loan officer discretion, employ a fair lending officer who will work in close consultation with the bank’s leadership and provide fair lending training to its personnel.
This consent order is the latest in a series of consent order the DOJ and Consumer Financial Protection Bureau have entered into this year with bank and non-bank lenders alleging discrimination in violation of the Fair Housing Act and the Equal Credit Opportunity Act. As has been done in the other cases, DOJ relied on a disparate impact theory in alleging violation of the statutes.