A Michigan bank will invest $165,000 in Saginaw and open a loan office there in order to settle accusations that it engaged in discriminatory practices by failing to properly serve African American neighborhoods. The Justice Department had accused of Community State Bank of racial discrimination, arguing that the bank violated Fair Housing rules by failing to serve the credit needs of predominately African-American areas to the extent it did for neighborhoods with a majority of white residents during a period ranging from 2006 to 2009.
While Community State Bank never acknowledged having engaged in discrimination, it agreed to settle the State Department's allegation by resolving to make significant investments in majority African American neighborhoods in the Saginaw area. The bank never faced any legal findings or lawsuits, though the settlement must still be approved by a court.
The bank agreed to open a loan production office in a largely African-American neighborhood in Saginaw and invest thousands of dollars in financial services for similar neighborhoods across the region. It will spend $15,000 to reach out to potential new customers in a number of neighborhoods, also investing $75,000 in local organizations devoted to providing community members with foreclosure prevention services and financial and credit counseling.
Additionally, the bank will implement a $75,000 financing initiative aimed at extending an increased amount of credit to African American neighborhoods in Saginaw. Community State Bank also pledged to train all of its employees in fair lending practices.
According to the U.S. Attorney who helped negotiate the settlement, the agreement will help Saginaw residents and those in surrounding regions gain improved access to much needed financial resources. She added the settlement will help provide better opportunities for home improvement and home ownership for individuals living in areas in which "credit has been unlawfully limited."
Source: Detroit Free Press, "Michigan bank accused of racial discrimination reaches settlement with Justice Dept.," Todd Spangler, Jan. 15, 2013
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