The Justice Department said in a press release Thursday that the $1.3 billion-asset bank will establish a $1.3 million settlement fund and pay a $50,000 civil penalty.
“This settlement will provide deserved relief to thousands of borrowers who suffered discrimination due to Evolve Bank’s pricing policies,” Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said in the release.
“This case marks the Justice Department’s latest step to protect Americans from illegal lending practices, and shows that we will hold lenders accountable for the effects of their discriminatory practices,” Clarke added.
The Justice Department, which opened an investigation after the Fed referred the matter, alleged that Evolve violated the Fair Housing Act and the Equal Credit Opportunity Act.
The DoJ claimed the bank’s loan pricing practices resulted in black, Hispanic and female borrowers paying more in the “discretionary pricing” components of mortgage than white or male borrowers for reasons unrelated to creditworthiness.
Since being notified of the investigation, Evolve has revised its policies and practices, the release said. During the four-year term of a proposed consent order, Evolve will maintain policies to reduce loan officer discretion, employ a fair lending officer to work with the bank’s leadership and provide fair lending training to its personnel.
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