Cadence Bancorp. in Houston has agreed to pay a $3 million penalty and provide more than $4 million in loan subsidies to address claims of discrimination in its mortgage lending operation.
The Justice Department and the Office of the Comptroller of the Currency said in a Monday press release that the settlement closes a probe into the $18.7 billion-asset company lending practices.
Cadence agreed in April to sell to the the $24 billion-asset BancorpSouth in Tupelo, Miss.
Cadence disclosed earlier this month that the Justice Department had warned of an upcoming penalty tied to potential fair-housing lending violations around Houston.
“There is no place for discrimination in the federal banking system,” acting Comptroller of the Currency Michael Hsu said in the release.
Paul Murphy Jr., Cadence’s chairman and CEO, said in a release that, while he believed the company had complied with fair-housing laws, he “recognized that the mortgage lending program was not where we wanted it to be” after buying Encore Bank in 2012.
“We subsequently developed and successfully implemented a coordinated set of efforts to sustainably increase our lending in majority-minority census tracts and minority neighborhoods in Houston,” Murphy said, adding that more than half of the company’s mortgage business has been directed toward minority neighborhoods in recent years.