A Historic Fair Lending Settlement for Connecticut Residents

The Center is delighted to announce the settlement of the fair lending complaint against Liberty Bank. This historic settlement will bring more than $16 million dollars in access to credit, homeownership subsidies, and economic development loans into low and moderate income communities of color. Many of these communities have not had access to credit for home buying or for home repairs. Furthermore, small businesses have not had access to credit or capital to spur economic development in these communities. Included in the settlement, Liberty Bank will open a loan production office in a neighborhood that continues to be underserved by banking institutions.

We look forward to working with our partners in the communities that will be affected by this settlement to ensure its success. We applaud Liberty’s commitment of time, energy and resources to a wide range of programs that will help promote financial education, expand opportunities for access to credit, and financially support programs developed to revitalize the housing market in communities in Connecticut that have traditionally had difficulty accessing credit.

Our congratulations to Center staff, Attorney David Lavery and Fair Housing Specialist Maria Cuerda who worked the case. We are grateful for their commitment to pursuing fair lending practices across Connecticut in all communities regardless of race or national origin.

See coverage in today’s Hartford Courant 

Read the full press release here. Press Release Final – CFHC v Liberty Bank

Center & NCLC File Federal Lawsuit Accusing Liberty Bank of Redlining

The Connecticut Fair Housing Center and the National Consumer Law Center today filed a lawsuit in the U.S. District Court for the District of Connecticut against Liberty Bank, alleging that the bank has violated the Fair Housing Act by engaging in unlawful “redlining” of predominantly African-American and Latinx neighborhoods in the greater Hartford and New Haven metropolitan areas. “Redlining” is the discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial or ethnic demographics of their neighborhoods.

The Fair Housing Act prohibits financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The complaint alleges that Liberty Bank has structured its residential mortgage lending business in such a way as to avoid serving the credit needs of Connecticut neighborhoods where a majority of residents are African-American and/or Latinx.

The bank’s alleged redlining practices include: excluding African-American and Latinx neighborhoods from the area it serves; intentionally locating branch offices and mortgage loan officers in only majority-white neighborhoods; and engaging in differential treatment of prospective loan applicants on the basis of race or ethnicity. An investigation by the Connecticut Fair Housing Center revealed that, going back to at least 2010, Liberty Bank has originated a significantly lower percentage of residential mortgage loans for properties in neighborhoods of color when compared with similar lenders.

“Redlining systematically denies people who live in neighborhoods of color access to homeownership, therefore denying them the opportunity to build wealth,” said Connecticut Fair Housing Center Executive Director Erin Kemple. “Unfortunately, fifty years after the passage of the Fair Housing Act, the practice continues. Liberty Bank is choosing to offer less assistance to communities of color in violation of the state and federal fair housing laws.”

“Liberty Bank’s practices and timing are particularly disturbing in light of the continuing impact of the Great Recession on households of color in Connecticut and around the nation,” said National Consumer Law Center Director of Litigation Stuart Rossman. “Latinx families lost 66 percent of their wealth and African American families lost 53 percent of their wealth compared to 16 percent loss of wealth for White families. Depriving equal access to mortgage credit exacerbates the continually growing racial economic gaps in our society and perpetuates the very segregation in our neighborhoods that the Fair Housing Act was meant to reduce, if
not eliminate.”

Click here for a copy of the complaint

 

Media coverage of this case:

Southington branch included in lawsuit alleging housing bias by Liberty Bank (Meriden Record-Journal, October 11, 2018)
Nonprofits File Federal Housing Lawsuit Against Liberty Bank (CTNewsJunkie, October 8, 2018)
CT Bank Sued for Alleged Discriminatory Mortgage Lending (National Law Review, October 9, 2018)
2 Consumer Groups Hit Conn. Bank With Redlining Suit (Law360, October 5, 2018)
Discrimination Against Customers Alleged in Liberty Bank Federal Suit (Connecticut Law Tribune, October 5, 2018)
Liberty Bank Accused of Racial Discrimination in Lending Practices (Hartford Courant, October 4, 2018)
Liberty Bank Accused of Racial Discrimination in Lending Practices (NY Daily News, October 4, 2018)
Lawsuit alleges discriminatory lending practices by Liberty Bank (Hartford Business Journal, October 4, 2018)

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