Mortgage

Fidelity Bank accused of denying mortgage loans based on race

North Carolina-based bank agrees to $1M settlement over discriminatory lending

The Department of Housing and Urban Development announced Friday that the Fair Housing Project of North Carolina Legal Aid and North Carolina-based Fidelity Bank reached a $1 million settlement agreement over allegations that the bank engaged in discriminatory lending practices.

According to the announcement from HUD, the settlement agreement stems from a complaint filed by the Fair Housing Project of North Carolina Legal Aid, which accused Fidelity Bank of denying mortgage loans based on race, which would be a violation of the Fair Housing Act.

The Fair Housing Act makes it unlawful to make housing unavailable or to discriminate in the terms, conditions, or privileges of the sale of a dwelling because of race.

Under the Fair Housing Act, banks and other lenders are also prohibited from discriminating with respect to home mortgage loans.

Under the terms of the settlement agreement, Fidelity will make investments and community development loans in “predominantly minority” census tracts, making at least 40% of those loans to specifically promote affordable housing.

Fidelity Bank committed to allotting at least $500,000 each year for two years, for a total of $1 million, to these endeavors.

In addition, Fidelity Bank will display a HUD Fair Housing poster in its branches in Raleigh.

The bank is also required to “prominently” display its non-discrimination policies at the same branch in both English and Spanish.

The bank will also provide fair lending training to staff, including loan originators and employees engaged in loan processing and underwriting.

“Whether intentional or not, stark disparities exist in lending patterns and access to credit along racial and ethnic lines,” said HUD Assistant Secretary for Fair Housing and Equal Opportunity Gustavo Velasquez. “HUD remains committed to not only enforcing the law, but also facilitating productive relationships between lenders and advocacy groups that help make lenders more aware of their obligations under the Fair Housing Act.”   

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