HUD Filed Against First Citizens Bank and Trust Co. in 2011 After Conducting an Analysis of 2010 Home Mortgage Disclosure Act (HMDA) Data
By Jeff Sorg, OnlineEd Blog
(June 9, 2016) – The U.S. Department of Housing and Urban Development (HUD) today announced an agreement with First-Citizens Bank & Trust Company, resolving allegations that the bank denied mortgage loans to African-American, Latino and Asian American mortgage applicants at a disproportionately higher rate than white applicants. HUD’s investigation concerned retail loans originated by the bank’s predecessor, First Citizens Bank and Trust Co., in 2010 and 2011. Read the agreement announced today.
Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said, “This agreement aligns our shared goals of promoting fair housing and expanding access to credit for qualified working families. HUD will use its enforcement powers to ensure that everyone has equal access to credit regardless of what they look like or where they come from.”
HUD filed a complaint against First Citizens Bank and Trust Co. in 2011 after conducting an analysis of 2010 Home Mortgage Disclosure Act (HMDA) data. In January 2015, the South Carolina-based bank was merged into First-Citizens Bank & Trust Company, a North Carolina-chartered commercial lender. As the successor, First-Citizens Bank & Trust Company continued to cooperate with HUD throughout this investigation and ultimate resolution announced today.
As part of the settlement, First-Citizens agreed to take several steps to ensure and protect equal access to credit including refraining from unlawful consideration of race or national origin when selecting sites for branch offices and services offered, conducting marketing, and defining Community Reinvestment Act assessment areas. In addition, First-Citizens will:
- Make $140,000 available to nonprofit organizations that provide credit and housing counseling, financial literacy training, and related programs to first-time homebuyers in South Carolina;
- Adopt a new standardized and objective set of guidelines for a second review of retail channel residential loan applications initially denied by the automated underwriting system;
- Require all of its employees and agents who have substantial involvement in manual underwriting of mortgages in their retail channel to attend fair housing training;
- Hire three mortgage banker market specialists that will focus on diverse lending in the Charleston-North Charleston-Summerville, Columbia, and Greenville-Anderson-Mauldin metro areas;
- Spend $20,000 for affirmative marketing, advertising and outreach to residents in majority-minority census tracts in South Carolina; and
- Partner with non-profit or community groups to conduct at least 24 financial education programs in South Carolina for individuals and small business owners.
People who believe they have experienced discrimination may file a complaint by contacting HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY). Housing discrimination complaints may also be filed at www.hud.gov/fairhousing or by downloading HUD’s free housing discrimination mobile application, which can be accessed through Apple and Android devices.
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Jeff Sorg is a co-founder of OnlineEd®, an online real estate, mortgage broker, and vocational school founded in 1997, where he also serves as Chief Executive Officer, and School Director. Sorg holds vocational and post-secondary school instructor licenses in several states and has authored numerous real estate continuing education and pre-licensing courses and has been awarded the International Distance Education Certification Center’s CDEi Designation for distance education. Memberships include ARELLO (Association of Real Estate License Law Officials), the National Association of REALTORS®, Oregon Association of REALTORS®, and Portland Metro Association of REALTORS®. Awards and service include REALTOR® Emeritus in the National Association, Life Member award in Portland Metro Association and Chairperson of the Oregon Real Estate Forms Committee.
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