Key Fair Lending Insights From DOJ 'Redlining' Deal

Law360 (August 1, 2019, 1:11 PM EDT) -- Last month, the U.S. Department of Justice settled redlining claims[1] against First Merchants Bank, an Indiana-based bank regulated by the Federal Deposit Insurance Corporation. The First Merchants settlement[2] is the first redlining matter initiated[3] and settled under the Trump administration, and it contains useful insights for institutions seeking to evaluate their own redlining risk. This article summarizes the case and the key compliance takeaways.

Background and Allegations

Investigation Was DOJ-Initiated

Although many DOJ fair lending investigations arise out of referrals from a prudential regulator or the Consumer Financial Protection Bureau,[4] the First Merchants settlement documents do not mention an underlying regulatory...

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