DOJ Launches New Discriminatory Credit score Initiative – Company Insurance
(Reuters) – The US Department of Justice is launching a nationwide initiative to combat discriminatory lending practices, Attorney General Merrick Garland said Friday.
Attorney General Garland said the illegal practice of "redlining" or avoiding credit to minority neighborhoods remains an ongoing problem and the federal government has spent more resources identifying it and penalizing lenders.
"Today we are committed to addressing modern redlining by making far more robust use of our fair lending agencies," he said. The new initiative will address fair lending issues "on a broader geographic scale than the Justice Department has ever done before," he added.
In particular, Attorney General Garland said authorities across the country are working with banking and consumer regulators, including the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, which oversees national banks.
The government has already launched several explorations for fair lending and expects more to follow shortly, he said.
Attorney General Garland also announced the first $ 8.85 million settlement under the initiative with TrustMark National Bank of Tennessee, which the government said it has avoided offering home loans in predominantly black and Hispanic neighborhoods .
Officials said they would focus on modern ways lenders could discriminate against borrowers. Rohit Chopra, Director of the Consumer Financial Protection Bureau, emphasized "digital redlining, camouflaged by so-called neutral algorithms".
"Algorithms can help remove bias, but black box underwriting decisions don't necessarily create a level playing field," he said at the announcement. "We will not allow robo-discrimination to spread."