Another Day, another $9 million Fair Lending Fine. Here’s How to Ensure the Next One Isn’t You

Another day, another DOJ fine against a lender for Fair Lending violations.

This time it's a $9 million fine imposed on Ameris for redlining.

This penalty has the distinction of being the 10th DOJ redlining consent decree in the last two years—totaling $107 million in fines.

And the DOJ is just getting started. At a press conference yesterday, Attorney General Merrick Garland said there are 20 more active redlining investigations at DOJ.

Keep in mind, the penalties in these cases haven't just been dollars. ??

Check out the other remedies the DOJ is requiring of Ameris:

• Ameris must open or acquire a full-service branch in a Black/Hispanic census tract “in a retail-oriented space in a visible location and have signage that is visible to the general public”;
• Ameris must hire 3 mortgage loan officers dedicated to serving Black and Hispanic neighborhoods, at least one of whom must be assigned to the required additional branch required;
• Ameris must hire a full time director of community lending to oversee outreach efforts to Black and Hispanic consumers and spend at least $180,000 per year on targeted marketing, outreach, and consumer financial education;
• And Ameris must overhaul its fair lending practices, including by implementing "ongoing statistical monitoring" of underwriting, pricing and redlining risk."

All of that is to say: the regulatory consequences of poor fair lending practices can be dire.?

Plus, Gen Z and Millennial consumers—who represent the future of the financial services industry—are quick to abandon brands found to be unfair.

The current economic climate is forcing lenders to make difficult decisions, many of which can have far-reaching implications for fair lending.?

With credit delinquencies rising and the outlook for consumer credit uncertain, lenders are under intense pressure to adjust their credit strategies more frequently. These adjustments can create disparities for historically underserved groups.

The best advice we give lenders in this climate is: Don't wait until the DOJ spotlight (and the subsequent negative headlines) finds you to check whether your decisions stand up to scrutiny.

FairPlay’s? fairness-as-a-service technologies will detect biases in your decisions and correct them early…before you wind up in hot water. Message me for a demo.