The Fairway Mortgage redlining settlement has resulted in a $9.9 million fine after allegations of discriminatory lending in Birmingham, Alabama. The Justice Department and the Consumer Financial Protection Bureau (CFPB) investigated the mortgage company’s practices, which limited access to loans for Black neighborhoods. This settlement is part of ongoing efforts to combat redlining nationwide.

Details of Fairway’s Redlining Practices

Fairway Mortgage was accused of prioritizing marketing in white neighborhoods while failing to serve Black communities. This illegal practice restricted credit access and reduced homeownership opportunities for people of color. As a result, Fairway had fewer loans in Black neighborhoods than its competitors.

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Breakdown of the Settlement

The Fairway Mortgage redlining settlement includes a $7 million loan subsidy fund. This fund will provide affordable loans for Black residents in Birmingham, supporting home purchases, refinancing, and home improvement. An additional $1 million will fund community outreach and financial education to reduce credit barriers.

Fairway’s Future Actions

Fairway Mortgage has agreed to open a new loan office in a majority-Black neighborhood in Birmingham. The company will also enhance advertising and outreach efforts to encourage more Black residents to apply for loans. The remaining $1.9 million of the settlement will go to the CFPB’s Civil Penalty Fund, which supports victims of financial misconduct.

“This settlement helps address credit inequities in Birmingham,” said Kristen Clarke, Assistant Attorney General for the Civil Rights Division.