Kansas City Lender Settles Redlining Charges

The U.S. Department of Housing & Urban Development (HUD) has reached a settlement with First Federal Bank of Kansas City to resolve charges of redlining against African-American borrowers.

The agreement follows two complaints filed last October by the nonprofit organizations Metropolitan St. Louis Equal Housing and Opportunity Council and Legal Aid of Western Missouri, which alleged the bank’s service area intentionally avoided the predominantly black communities within Kansas City. Under the terms of the settlement, First Federal Bank of Kansas City will offer $75,000 in discounts or subsidies on home purchase loans on owner-occupied properties in predominantly black neighborhoods and maintain three full-service branches in these neighborhoods that will originate $2.5 million in mortgages over a three-year period. The bank will also pay $50,000 to the nonprofits that filed the complaint.

“This agreement helps to ensure that all qualified families in the Kansas City area get a fair shot at owning their own home, regardless of race,” said HUD Assistant Secretary for Fair Housing and Equal Opportunity Gustavo Velasquez. “HUD will continue to work with banks across the nation to ensure they follow the Fair Housing Act.”

First Federal Bank of Kansas City, which has not updated the news release section of its website since April 2015, had no public comment on the settlement. The agreement did not require the bank to acknowledge that it practiced redlining.