The past few years have been marked by prosecutions by the federal government of lending bias, but the pace may slow under the newly installed Trump administration, The New York Times reports.
That’s tied to a movement to roll back regulations carrying over into methods in place to stymie discriminatory lending.
In just one example chronicled by the NYT, the U.S. Justice Department levied a suit against a small community bank in Minnesota, KleinBank, alleging equal opportunity was denied to minorities applying for loans tied to housing in the wake of the financial crisis. Pursuit of such legal actions has netted $1.4 billion in settlements over fair lending practices. In 2015, there were 18 investigations, with eight cases filed, nine settled and $82 million garnered in redress.
Part of the impetus to pursue discriminatory cases, commonly grouped under a concept known as redlining, comes from a Supreme Court decision that came in 2015, which stated in part that some practices could be deemed discriminatory, even on an unintentional basis.
But under the Trump administration, banks may see respite as the Justice Department pursues cases sparingly. One “bright spot,” as noted by the NYT: The Consumer Financial Protection Bureau, which has been, and had been, pursuing its own spate of fair lending cases, also focused on redlining. As has been reported, though, that agency may be in flux with legal wrangling over its executive structure.