Memphis, TN - The Justice Department today announced it has secured an agreement to resolve
allegations that Evolve Bank & Trust, which is headquartered in Memphis, engaged in lending
discrimination on the basis of race, sex and national origin in the pricing of its residential
mortgage loans from at least 2014 through 2019.
Evolve Bank maintains mortgage lending offices and provides mortgage lending services in 15 states
throughout the country. Under the department’s settlement, which is subject to the approval of the
District Court, Evolve Bank will establish a settlement fund of $1.3 million to compensate affected
borrowers. Evolve Bank will also 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," said Assistant Attorney General Kristen Clarke of the
Justice Department’s Civil Rights Division. “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."
“This settlement provides some measure of justice to those wronged by Evolve Bank’s discriminatory
acts," said U.S. Attorney Kevin G. Ritz for the Western District of Tennessee. “I also hope it
sends a strong message to banks and other lenders that the Department of Justice won’t stand for
unlawful barriers in residential mortgage lending. It’s past time for these practices to stop."
The department opened its investigation after the Board of Governors of the Federal Reserve System
referred the matter. Consistent with federal law, the Board has long
referred matters involving potential fair lending violations to the Department of Justice.
According to the complaint, the Justice Department alleges that Evolve Bank violated the Fair
Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from
discriminating on the basis of race, sex or national origin in their mortgage lending services.
Specifically, the complaint alleges that, from at least 2014 through 2019, Evolve Bank’s loan
pricing practices resulted in Black, Hispanic, and female borrowers paying more in the
“discretionary pricing" components of home loans than white or male borrowers for reasons
unrelated to their creditworthiness. “Discretionary pricing" means the parts of a loan price that
are left up to Evolve’s loan officers and managers, including fees, charges or rate discounts that
don’t relate to the borrowers’ credit qualifications or loan characteristics.
Since being notified of the department’s investigation of this matter, Evolve has taken steps to
revise its policies and practices that resulted in Black, Hispanic and female borrowers paying more
for home loans than white or male borrowers. During the four- year term of the proposed consent
order, Evolve will maintain policies that reduce loan officer discretion, employ a fair lending
officer who will work in close consultation with the bank’s leadership and provide fair lending
training to its personnel.
The department’s Civil Rights Division has long been engaged in work that seeks to make mortgage
credit and homeownership accessible to all Americans on the same terms, regardless of race, sex or
national origin. In January 2021, President Biden reaffirmed the critical role of the federal
government in addressing legacies of housing segregation and discrimination, declaring that it is
the policy of this Administration to eliminate “racial bias and other forms of discrimination in
all stages of home-buying and renting."
The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights
Division’s Housing and Civil Enforcement Section. Additional information about the Section’s fair
lending enforcement can be found at the Justice Department webpage. Individuals may report lending
discrimination by calling the Justice Department’s Housing Discrimination tip line at
1-833-591-0291 or submitting a report online.
Source: U.S. Department of Justice, Office of the United States Attorneys
