Cadence Bancorp paying $ 8.5 million to settle redlining allegations

Cadence Bancorp paying $ 8.5 million to settle redlining allegations

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Cadence Bancorp paying $ 8.5 million to settle redlining allegations

Cadence Bancorp in Houston has agreed to pay a $ 3 million penalty and provide more than $ 4 million in loan subsidies to new borrowers to settle allegations of discrimination within its mortgage lending business.

The agreement announced Monday by the Justice Department and the Office of the Comptroller of the Currency closes an investigation into Cadence’s lending practices at a time when regulators are evaluating the company’s planned merger with the $ 24 billion-asset BancorpSouth in Tupelo, Mississippi.

The Justice Department under President Trump reportedly dropped its investigation into Cadence Bancorp but resumed it after President Biden took office.

Bloomberg

The $ 18.7 billion-asset Cadence disclosed in early August that the Justice Department had warned of an upcoming penalty regarding potential fair-housing lending violations in the Houston market. Prosecutors claim that Cadence was avoiding providing home loans in the area’s communities of color while concentrating branches and loan officers in majority-white neighborhoods between 2013 and 2017, an illegal practice known as redlining.