Wednesday, January 17, 2024, the United States Department of Justice reached an agreement with Patriot Bank regarding claims of lending discrimination and redlining in majority-Black and Hispanic neighborhoods in Memphis, Tennessee. To resolve these allegations, Patriot Bank has been charged to invest $1.9 million in local communities of color.

Complaints against Patriot Bank allege that between 2015 and 2020 the bank "avoided providing mortgage services to majority-Black and Hispanic neighborhoods in Memphis and discouraged people seeking credit in those communities from obtaining home loans" (U.S. Department of Justice, 2024). It was found that Patriot's mortgage lending disproportionately occurred in majority white communities in Memphis. Further, it was found that other banks "received nearly 3.5 times as many loan applications [in Black and Brown communities] compared to Patriot" (U.S. Department of Justice, 2024). 

The settlement requires Patriot Bank to invest $1.9 million to expand lending and credit opportunities to communities of color in Memphis, TN. Patriot Bank has agreed to do so through the 6 following strategies: 

1. Invest at least $1.3 million in a loan subsidy fund to increase access to home mortgage, home improvement and home refinance for residents of majority-Black and Hispanic neighborhoods

2. Spend $375,000 for advertising, outreach, consumer financial education and credit counseling focused on majority-Black and Hispanic neighborhoods

3. Spend $225,000 on community partnerships to provide services that increase residential mortgage credit access for residents of those neighborhoods

4. Ensure at least two mortgage loan officers are dedicated to serving majority-Black and Hispanic neighborhoods in the Bank’s service area

5. Employ a Director of Community Lending who will oversee the continued development of lending in communities of color

6. Continuously assess the communities’ credit needs throughout the term of the consent order.

This settlement likely heralds new funding and partnership opportunities for local organizations involved in community development, fair housing, and financial empowerment. We look forward to seeing the impact of this $1.9 million investment in Memphis communities.

Read the full Department of Justice Press Release here.

Source: U.S. Department of Justice. (2024, January 19). Justice Department Secures Agreement with Patriot Bank to Resolve Lending Discrimination Claims [Press Release].