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ARTICLE · 23 OCTOBER 2015

CFPB Redlining Enforcement Action Reflects New Approach To Redlining Analysis

McGuireWoods LLP
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On October 1, 2015, McGuireWoods reported on the mortgage redlining settlement entered into by Hudson City Savings Bank, F.S.B. (Hudson City), the Consumer Financial Protection Bureau (CFPB), and the Department of Justice (DOJ).

United StatesFinance and Banking
Terrence M. McKelvey
Terrence M. McKelvey
Jodie Herrmann Lawson
Jodie Herrmann Lawson

On October 1, 2015, McGuireWoods reported on the mortgage redlining settlement entered into by Hudson City Savings Bank, F.S.B. (Hudson City), the Consumer Financial Protection Bureau (CFPB), and the Department of Justice (DOJ). Aside from the significant costs imposed on Hudson City under the consent order, the action also illustrates the CFPB's revised approach to redlining analysis, focusing on applications rather than originations and comparing Hudson City's credit application statistics to those of its peers. The complaint  identified the following statistically significant disparities:

  • Hudson City generated only 4.8 percent of its applications in the New York/New Jersey Metropolitan Statistical Area (MSA) from properties in majority African-American or Hispanic census tracts, while peer banks generated 13.2 percent of their applications from such majority tracts.

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