Industry News

Bank to pay $100K settlement for ‘no row house’ policy

Denies discrimination charges in East Coast cities

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An Indiana bank has agreed to pay $100,000 to settle allegations that it discriminated against minorities by refusing to make loans on row houses in Baltimore, Philadelphia and Washington, D.C. First Indiana Bank NA denied the allegations, outlined in a complaint filed by the National Community Reinvestment Coalition (NCRC), but agreed to institute a second review procedure for all denied loan applications and inform loan brokers that it has discontinued its no-row-home and minimum-property-value policies. NCRC alleged that First Indiana refused to make loans on row homes and any property valued at less than $100,000. Because those properties, along with row houses, are more heavily concentrated in African-American and Hispanic neighborhoods, the policies were discriminatory, NCRC alleged. The settlement negotiated by the U.S. Department of Housing and Urban Development prohibits the bank from using minimum property values as underwriting criteria or from excluding row h...