The Trump administration’s top banking regulator has sidelined at least half a dozen investigations into discriminatory lending practices by Bank of America and other banks across the U.S., according to a new report.
The Treasury Department’s Office of the Comptroller of the Currency reportedly closed no fewer than six investigations into banks found to have practiced “redlining” against minority borrowers—despite staff recommendations that fines or other penalties be imposed against those lenders, according to the report by ProPublica and The Capitol Forum.
In the case of Bank of America, OCC examiners found that the nation’s second-largest bank was offering disproportionately fewer loans to minority homebuyers in Philadelphia than it was to white people. But the investigation was met with complaints and resistance from Bank of America, and by September 2018, the OCC’s inquiry was effectively shelved with no sanctions against the bank.
Other banks examined by the OCC for discriminatory practices included Michigan-based Flagstar Bank; Colorado Federal Bank; Chicago-based MB Financial; Atlanta-based Cadence Bank; and Pennsylvania-based Fulton Bank. In each of these cases, OCC investigators found that the banks were treating minority borrowers unfairly—such as charging Black, Latino, and women customers more for mortgages, or holding them to a higher standard to qualify for certain loans.
Despite evidence of wrongdoing in each of these cases, the OCC pursued no actions against the offending banks. Representatives for the OCC and the banks involved declined to comment on the investigations to ProPublica and The Capitol Forum.
While the OCC has historically prioritized the interests of banks over those of bank customers, current and former OCC employees say the balance has shifted even further under the Trump administration, which has seemingly deprioritized civil rights enforcement as part of its overall deregulation of the banking sector.
“We have not always been the biggest defender of consumers,” one veteran OCC attorney told ProPublica and The Capitol Forum. “Lately, though, we are outright hostile.”
Despite the passage of legislation meant to combat and outlaw redlining—such as the Community Reinvestment Act of 1977—discriminatory practices persist across the financial services industry, including in the banking and insurance sectors.
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