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Motor City Case Raises Red Flags on Redlining

Warren W. Traiger

May 13, 2011

Last week the Department of Justice reached a settlement with Citizens Republic Bancorp in a lawsuit alleging redlining discrimination in Detroit. The suit said Citizens violated fair-lending laws by serving the credit needs of predominantly white neighborhoods to a significantly greater extent than the credit needs of majority black neighborhoods.

Thomas Perez, assistant attorney general in charge of the Justice Department's civil rights division, was quoted in the Detroit News as calling the settlement "innovative" and saying it may serve as a model in other areas. He said the department was involved in 60 cases nationwide concerning similar accusations of discriminatory lending.

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Published by American Banker