MISSISSIPPI (WDAM) - The Mississippi-based bank has agreed to pay $10.6 million to settle civil charges after being accused of "numerous" discriminatory mortgage lending practices that harmed African-Americans and other minority borrowers.
The U.S. Justice Department and Consumer Financial Protection Bureau said in a court filing that BancorpSouth Inc. turned down black home buyers applying for mortgages more often than similar white applicants, or charged them higher rates to borrow under a policy the government described as "explicitly discriminatory."
The bank also allegedly engaged in redlining in Memphis, a practice to deny service because of an area's racial demographics, by placing its branches outside of minority-dominant neighborhoods, the agencies said.
"The bank instructed loan officers to 'turn down' minority applicants more quickly than white applicants and not to provide credit assistance to 'borderline' applicants that other applicants may have received," the regulators said in their complaint filed with the U.S. District Court for the Northern District of Mississippi.
BancorpSouth during this period required its employees to treat applications based upon a potential borrower's race, color and national origin, according to the complaint filed in the case. Bank employees were audio-taped using racial epithets, followed by laughter, when discussing the possibility of hiring of an African-American employee, according to the documents released by Justice Department and CFPB.
BancorpSouth, which operates in eight states and has total assets of $13.9 billion, said it settled the matter without confirming or denying the allegations. The settlement, which must be approved by a federal-district court, requires the bank to pay $10.6 million, including $4 million in direct loan subsidies in minority neighborhoods.
"BancorpSouth is dedicated to a culture of respect, diversity and inclusion in both our workplace and communities," said BancorpSouth Chairman and CEO James Rollins, in a statement. "We have a longstanding commitment to equal treatment and any form of discrimination will not be tolerated."