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HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

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Politics & MoneyMortgage

Associated Bank settles with HUD over discriminatory lending

Bank will fund $200 million in mortgage loans for minority neighborhoods

Wisconsin-based Associated Bank (ASB) will provide approximately $200 million in mortgage loans for borrowers in minority neighborhoods as part of a settlement with the U.S. Department of Housing and Urban Development over charges of discriminatory lending.

Associated Bank disclosed the settlement in a filing last week with the Securities and Exchange Commission.

According to the filing, as reported by the Milwaukee Journal-Sentinel and spotted by Phil Hall, the settlement agreement resolves HUD’s investigation into Associated Bank’s lending practices from 2008 to 2011.

Associated Bank’s SEC filing states that HUD filed a complaint against the bank, accusing the bank of discriminating on the basis of race and national origin by “disproportionately denying” the loan applications of African-American and Hispanic applicants.

Associated Bank also allegedly “underserved” neighborhoods with significant African-American or Hispanic populations, in spite of demand for mortgage loans in those neighborhoods.

The filing states that HUD’s investigation concluded that, compared to other lenders, Associated Bank’s lending in majority-minority census tracts was lower than in other neighborhoods, and the difference was “statistically significant.”

As is customary with settlements such as these, Associated Bank denies the allegations of discrimination but is agreeing to take a number of measures to improve its lending practices involving minorities.

"Associated is pleased to have concluded these discussions and will fully comply with the agreement. Doing so aligns with our ongoing commitment to our customers and communities where we do business," said Philip Flynn, president and CEO of Associated Bank, in a statement.

"We agree with HUD that we can improve our performance in some of the communities and neighborhoods we serve,” Flynn said. “We remain committed to the promotion of home ownership and lending in those areas.”

Under the terms of the agreement, Associated Bank said it will “complement its existing lending programs and market strategies with additional initiatives.”

Those include enhanced training, a new branch location and loan production offices, expanded special financing programs and affordable home repair grants, the bank said.

The bank said it will undertake additional affirmative marketing outreach programs and financial education efforts to increase awareness of these community-based programs.

According to the Journal-Sentinel report, Associated Bank will finance additional mortgage lending in several previously underserved markets, including Chicago market, $144 million; metro Milwaukee market, $36 million; Lake County, Ill.-Kenosha County market, $10.8 million; Minneapolis-Northwest Wisconsin market, $3.6 million; and Racine, $1.53 million.

When combined with the company's current lending efforts, the bank expects these new programs and efforts to generate almost $200 million in new loans in targeted areas over the next three years.

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