The agency’s complaint, which was in the Eastern District of Tennessee, alleged that the $2.9 billion-asset bank’s discriminatory practices took place between December 2015 and April 2021. The investigation originated from a referral by the Federal Deposit Insurance Corp.
SouthEast, which cooperated with the probe and worked with the DoJ to resolve the allegations, agreed to compensate applicants who were denied the ability to refinance their student loans due to the bank’s policies. SouthEast agreed to increase access to student loan refinancing for qualified graduates of schools that were previously excluded under the policy.
The bank will also provide consumer financial education to students and graduates of previously excluded schools.
SouthEast, in a statement, said it decided to settle the claims to “focus on our customers and the communities that we serve” rather than “expending our resources on extensive litigation.”
The bank said believes the allegations are unfounded and address an underwriting methodology that it discontinued nearly four years earlier. The bank noted that the Department of Education continues to use the methodology to determine students’ eligibility to receive Title IV federal financial aid, including federal student loans.