By Ken Sweet, Associated Press
NEW YORK — The Department of Justice and the Consumer Financial Protection Bureau (CFPB) fined Mississippi-based BancorpSouth $10.6 million, alleging the bank deliberately discriminated against minorities in its lending practices.
BancorpSouth, a medium-sized regional bank with $13.9 billion in assets and 239 branches in eight states, deliberately avoided building branches in minority neighborhoods in Memphis, Tennessee from at least 2011 to 2013. The bank also denied more loans to African Americans and other minorities when compared to neighborhoods with smaller minority populations, the Justice Department and CFPB said Wednesday, and minorities who were approved for loans were given higher interest rates when compared to non-minorities.
While BancorpSouth is based in Tupelo, Mississippi, the case deals with BancorpSouth’s presence in Memphis and stems from a 2014 investigation into BancorpSouth by the Justice Department and CFPB.
The bank had 22 branches in the Memphis area between 2011 and 2013, all of which were located outside neighborhoods with large minority populations. Maps provided by the regulators also showed nearly all BancorpSouth’s loans originated outside minority neighborhoods of Memphis as well.
“BancorpSouth’s discrimination throughout the mortgage lending process harmed the people who were overcharged or denied their dream of homeownership based on their race, and it harmed the Memphis minority neighborhoods that were redlined and denied equal access to affordable credit,” CFPB Director Richard Cordray said in prepared remarks.
BancorpSouth during this period required its employees to treat applications based upon a potential borrower’s race, color and national origin.…