CFPB - Consumer Financial Protection Bureau
10/15/2024 | Press release | Distributed by Public on 10/15/2024 13:24
Enforcement Action (Fairway Independent Mortgage Corporation)
On October 15, 2024, the Bureau, together with the United States Department of Justice (DOJ), filed a complaint and proposed consent order to resolve their allegations against Fairway Independent Mortgage Corporation (Fairway). Fairway is incorporated in Texas and headquartered in Madison, Wisconsin. Fairway acquired mortgage company, MortgageBanc, in 2009, and since 2009, Fairway has operated in the Birmingham-Hoover, AL Metropolitan Statistical Area (Birmingham MSA) under the trade name MortgageBanc. The Bureau's and DOJ's joint complaint alleges that Fairway engaged in unlawful discrimination against applicants and prospective applicants, including by redlining majority-Black and high-Black areas in the Birmingham MSA and engaging in acts and practices directed at applicants and prospective applicants that would discourage a reasonable person from making or pursuing an application for credit on the basis of race or color in violation of the Equal Credit Opportunity Act, Regulation B, and the Consumer Financial Protection Act of 2010. DOJ also alleges that Fairway's conduct violated the Fair Housing Act. If entered by the court, the proposed consent order would require Fairway to invest $7 million in a loan subsidy program under which Fairway must offer home purchase, refinance, and home improvement loans on a more affordable basis than otherwise available for certain residential properties located in majority-Black neighborhoods in the Birmingham MSA. Fairway must also open or acquire a new loan production office or full-service retail office in a majority-Black neighborhood in the Birmingham MSA. Fairway must also spend at least $500,000 on advertising and outreach, at least $250,000 on consumer education, at least $250,000 on partnerships with one or more community-based or governmental organizations, and take other remedial steps, to serve the credit needs of majority-Black neighborhoods in the Birmingham MSA. Fairway must also pay a civil money penalty of $1.9 million.