Patriot Bank in Millington, Tenn., will pay $1.9 million to settle a redlining probe.
The Justice Department said in a press release that, under a proposed consent order, the $459.4 million-asset bank will invest at least $1.3 million in a loan subsidy fund to increase mortgages, refinances and home improvement loans in majority-Black and Hispanic neighborhoods.
Patriot will spend $375,000 on advertising, outreach, consumer financial education and credit counseling focused on majority-Black and Hispanic neighborhoods. It will also invest $225,000 in community partnerships to provide services to boost mortgage credit access for people in those areas.
The bank, which cooperated with the DoJ’s investigation, will dedicate two mortgage loan officers to serve majority-Black and Hispanic neighborhoods in its service area. It will also employ a director of community lending.
The DoJ had alleged, following a referral from the Federal Reserve, that the bank from 2015 to 2020 had avoided providing mortgage services in majority-Black and Hispanic neighborhoods in Memphis, Tenn.
Patriot “has always acted to serve the home mortgage credit needs in minority neighborhoods, and the bank’s strong record speaks for itself and flatly contradicts any allegation of wrongdoing,” John Smith, the bank’s president and CEO, said in a statement.
“We are proud of our record and strongly deny that Patriot Bank ever avoided originating home mortgage loans in Black and Hispanic areas of the Memphis market,” Smith added.
The bank noted that it recently partnered with a leading community development organization and the City of Memphis to finance a residential project in a low-income and Black neighborhood in South Memphis.