While the lender operated several loan offices in Birmingham, they were all in majority-white areas, and less than 3% of its direct mail advertising was sent to majority-Black neighborhoods between 2018 and 2020. As a result, Fairway’s loan application rate in Black neighborhoods was just 3.7% during this period, while its peer lenders served these areas at more than three times that rate.
“The CFPB and DOJ are holding Fairway accountable for redlining Black neighborhoods,” said CFPB director Rohit Chopra. “Fairway’s unlawful redlining discouraged families from seeking loans for homes in Birmingham’s Black neighborhoods.”
Read more: How to root out discrimination in the mortgage industry
Despite agreeing to the settlement, Fairway firmly denied that it engaged in discriminatory lending practices. In a statement, the company expressed frustration with how the government’s analysis was based on quotas rather than evidence of actual discrimination.
“The complaint significantly mischaracterizes the matter at issue and appears to be intentionally inflammatory in nature. For one, the complaint characterizes Fairway’s actions as willful and reckless, a claim that was mutually rejected by the parties prior to settlement,” the statement read. “In addition, the complaint characterizes Fairway’s actions as willful and intentional, despite the government agencies’ failure to identify any evidence to support such a claim. Fairway is disappointed by these statements in the complaint, which suggest bad faith by the part of the government agencies.”