Month: September 2022

Source: United States Department of Justice News

Remarks as Prepared for Delivery

Good morning. I am Kristen Clarke, Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice. It is my honor to be joined today with U.S. Attorney Phillip Sellinger for the District of New Jersey.

Ending redlining is a critical step in our work to close the widening gaps in wealth between communities of color and others.

Less than one year ago, Attorney General Merrick B. Garland announced the Justice Department’s Combating Redlining Initiative – our most aggressive and coordinated effort to address redlining. At that announcement, I stated that we have a duty to act now because persisting racial inequality and widening wealth gaps make clear that staying the course is not enough. Bold, new action must be taken to eradicate redlining, and move closer to the goal of equal opportunity in our country.

Through this initiative, the Civil Rights Division is working to make fair access to credit a reality in communities of color across the country – and we are doing so in partnership with U.S. Attorneys’ Offices.

Today I am pleased to announce that we have secured a $13 million settlement with Lakeland Bank. The agreement resolves allegations that Lakeland redlined predominantly Black and Hispanic neighborhoods in the Newark, New Jersey, area.  This settlement demonstrates our firm commitment to combating modern-day redlining and holding banks and other lenders accountable when they deny people of color equal access to lending opportunities. Through this agreement, we are sending a strong message to the financial industry that we will not stand for discriminatory and unlawful barriers in residential mortgage lending. U.S. Attorney Sellinger, our partner in this matter, will discuss this settlement in greater detail shortly. 

Since August 2021, CRT has resolved four redlining cases. Collectively, these settlements provide over $38 million in relief for borrowers in Houston, Memphis, Philadelphia and Newark. Never before has the department resolved four redlining cases in shortly over one year. 

• Cadence Bank – Houston, Texas (Aug. 31, 2021) – $4.17 million subsidy fund
• Trustmark National Bank – Memphis, Tennessee (Oct. 27, 2021) – $3.85 million subsidy fund
• Trident Mortgage Co – Philadelphia, Pennsylvania (July 27, 2022) – $18.4 million subsidy fund (first settlement involving non-depository institution
• Lakeland Bank – Newark, New Jersey (Sept. 28, 2022) – $12 million subsidy fund

Our colleagues in the District of New Jersey have been critical partners in our efforts to combat redlining. In 2015, we partnered with this office to resolve our largest redlining settlement of $25 million against Hudson City Savings Bank. Through that settlement, approximately 2,600 borrowers received mortgage loans in previously redlined communities of color. Over 2,000 of the loans were used to purchase homes, thereby providing an opportunity to generate wealth through home equity.

Through our redlining compliance work, we have observed that the provisions in our consent orders yield substantial benefits not just for impacted borrowers, but also for broader communities and for lenders. 

• First, we are creating homeownership opportunities for borrowers, and especially borrowers of color. One of the biggest hurdles to buying a home is saving sufficient funds for the down payment. This is especially true as potential borrowers face the challenges of inflation. The down payment assistance provided through the subsidy funds in our settlements literally opens the doors of homeownership to qualified borrowers and puts them on a path to generate wealth.
• Second, we are strengthening and developing partnerships between lenders and community organizations. Partnerships with community groups are often significant to both help lenders gain credibility in communities where they have not had a presence and to connect them with homeownership ready borrowers. Often times, these groups are essential in helping lenders assess the credit needs of a community.
• Third, we are increasing business opportunities for lenders. When lenders commit to serving underserved markets, they increase the number of profitable loans that can be made to qualified borrowers. They often go from trailing their peers to leading their peers in generating applications and originating loans in communities of color. Through strengthening their compliance management systems, they also are less likely to be investigated or sued for fair lending concerns.

We hope that this settlement sends a strong message regarding our commitment to ending redlining across the nation. We encourage lenders to be proactive in assessing whether they are serving all communities. We also encourage lenders to be like Lakeland and proactively commit to remedying redlining concerns that have been identified.

I will now turn it over to U.S. Attorney Sellinger to provide more information about our resolution with Lakeland Bank.

Source: United States Department of Justice News

The Justice Department today announced that Westlake Financial has agreed to pay over $225,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by failing to provide qualified servicemembers with interest rate benefits for the entire period required under the SCRA and by improperly delaying approval of interest rate benefit requests.

“The Servicemembers Civil Relief Act makes clear that those serving in our nation’s military are entitled to receive interest rate benefits as soon as they are called to service,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement sends the message that we will hold companies accountable when they deny servicemembers the important interest rate benefits they are entitled to under federal civil rights law.”

“Servicemembers make enormous sacrifices, and we have a responsibility to protect their rights and ensure they have full access to important benefits guaranteed under the law,” said U.S. Attorney Martin Estrada for the Central District of California. “The settlement with Westlake Financial reflects the Justice Department’s firm commitment to protecting the rights of servicemembers – and to defending civil rights for everyone.”

The SCRA provides that interest on any debt incurred by a servicemember before entering military service is limited to six percent per year. In order to take advantage of the interest rate cap, a servicemember must provide the creditor with written notice and a copy of their military orders or other documentation of their military service no later than 180 days after leaving service. After receiving notice, a creditor must forgive any interest in excess of 6% retroactively back to the date orders are issued calling the servicemember to active duty.

Westlake Financial is a Los Angeles-based auto finance company that specializes in subprime and near-subprime loans. In 2017, the Justice Department filed a complaint in the U.S. District Court for the Central District of California alleging that Westlake and its subsidiary, Wilshire Commercial Capital, violated the SCRA by unlawfully repossessing at least 70 vehicles owned by SCRA-protected servicemembers. In order to resolve those allegations, Westlake entered into a settlement requiring the company to pay over $700,000 to servicemembers and a $60,788 civil penalty and to be subject to monitoring by the department.

While monitoring Westlake’s compliance with the SCRA, the Justice Department discovered problems with the company’s handling of interest rate benefit requests. The department determined that Westlake was failing to apply interest rate benefits back to the date orders were issued calling the servicemember to active duty. The department also determined that Westlake had improperly delayed the approval of interest rate benefits to some servicemembers.

Under the amended settlement agreement, Westlake has agreed to pay an additional $185,460 to 250 servicemembers who did not receive interest rate benefits back to the date their orders were issued or who had to wait more than 60 days to receive their benefits. Each servicemember who did not receive interest rate benefits back to the date their orders were issued will receive a refund of any excess interest they paid, as well as an additional payment of three times the overpayment or $100, whichever is higher. Servicemembers whose interest rate approvals were delayed more than 60 days will each receive $500. Westlake will also be required to pay an additional $40,000 civil penalty to the United States. The amended agreement also requires Westlake to revise its SCRA policies and procedures and training to ensure that interest rate benefits are timely and appropriately applied to servicemember accounts.

This case was handled by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Central District of California. Since 2011, the Justice Department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil.

Source: United States Department of Justice 2

          LOS ANGELES – The Justice Department today announced that Westlake Financial has agreed to pay more than $225,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by failing to provide qualified servicemembers with interest rate benefits for the entire period required under the SCRA and by improperly delaying approval of interest rate benefit requests.

          “Servicemembers make enormous sacrifices, and we have a responsibility to protect their rights and ensure they have full access to important benefits guaranteed under the law,” said United States Attorney Martin Estrada. “The settlement with Westlake Financial reflects the Justice Department’s firm commitment to protecting the rights of servicemembers – and to defending civil rights for everyone.”

          “The Servicemembers Civil Relief Act makes clear that those serving in our nation’s military are entitled to receive interest rate benefits as soon as they are called to service,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement sends the message that we will hold companies accountable when they deny servicemembers the important interest rate benefits they are entitled to under federal civil rights law.”

          The SCRA provides that interest on any debt incurred by a servicemember before entering military service is limited to 6 percent per year. To take advantage of the interest rate cap, a servicemember must provide the creditor with written notice and a copy of their military orders or other documentation of their military service no later than 180 days after leaving service. After receiving notice, a creditor must forgive any interest in excess of 6 percent retroactively back to the date orders are issued calling the servicemember to active duty.

          Westlake Financial is a Los Angeles-based auto finance company that specializes in subprime and near-subprime loans. In 2017, the Justice Department filed a complaint in United States District Court in Los Angeles alleging that Westlake and its subsidiary, Wilshire Commercial Capital, violated the SCRA by unlawfully repossessing at least 70 vehicles owned by SCRA-protected servicemembers. To resolve those allegations, Westlake entered into a settlement requiring the company to pay over $700,000 to servicemembers and a $60,788 civil penalty and to be subject to monitoring by the department.

          While monitoring Westlake’s compliance with the SCRA, the Justice Department discovered problems with the company’s handling of interest rate benefit requests. The department determined that Westlake was failing to apply interest rate benefits back to the date orders were issued calling the servicemember to active duty. The department also determined that Westlake had improperly delayed the approval of interest rate benefits to some servicemembers.

          Under an amended settlement agreement, Westlake has agreed to pay an additional $185,460 to 250 servicemembers who did not receive interest rate benefits back to the date their orders were issued or who had to wait more than 60 days to receive their benefits. Each servicemember who did not receive interest rate benefits back to the date their orders were issued will receive a refund of any excess interest they paid, as well as an additional payment of three times the overpayment or $100, whichever is higher. Servicemembers whose interest rate approvals were delayed more than 60 days will each receive $500. Westlake will also be required to pay an additional $40,000 civil penalty to the United States. The amended agreement also requires Westlake to revise its SCRA policies and procedures and training to ensure that interest rate benefits are timely and appropriately applied to servicemember accounts.

          Assistant United States Attorney Matthew E. Nickell of the Civil Division’s Civil Rights Section, and Trial Attorneys Audrey M. Yap and Alan A. Martinson of the Justice Department’s Civil Rights Division’s Housing and Civil Enforcement Section worked on this case.

          Since 2011, the Justice Department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov.

          Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil.

Source: United States Department of Justice News

Memphis, TN – Kevin G. Ritz was sworn in September 28, 2022, as United States Attorney for the 
Western District of Tennessee.  In a brief ceremony at the federal courthouse  in  Memphis,  Chief  
U.S.  District  Court  Judge  S.  Thomas  Anderson administered the oath of office, in front of 
Ritz’s family and U.S. Attorney’s Office colleagues. Ritz was nominated by President Joe Biden on 
July 29, 2022, and he was unanimously confirmed by the United States Senate on September 22, 2022. 
As United States Attorney, Kevin is the chief federal law enforcement officer in West Tennessee.

Ritz stated: “It is an honor to lead the office where I have worked for 17 years.  I’ve dedicated 
my career to serving the United States, and I can’t wait to start this next chapter. I want to 
thank President Biden for nominating me, the Senate for confirming me, and Congressman Cohen for 
recommending me for this position.”

“I look forward to working with my colleagues and our partners to promote and defend the interests 
of our country throughout the 22 counties of West Tennessee. We have a lot of work to do, and I’m 
ready to get going.”

Kevin G. Ritz is a Memphian who has dedicated his entire career to federal public service. He has 
been an Assistant United States Attorney in the United States Attorney’s Office for the Western 
District of Tennessee since 2005.  He started in the narcotics unit prosecuting drug, firearm, 
robbery, carjacking, and other offenses. He later held various leadership positions in the office, 
including serving as Appellate Chief and Special Counsel for over a decade. He has written more 
than 200 appellate briefs and argued 37 cases in the federal courts of appeals.

Ritz has twice served on the Department of Justice’s Appellate Chiefs Working Group. From 2020 to 
2021, he was the Chair of the Tennessee Bar Association’s Appellate Practice Section, and in 2017 
Ritz was the President of the Federal Bar Association’s Memphis Chapter. From 2008 to 2016, Ritz 
was an Adjunct Professor at the University of Memphis Cecil C. Humphreys School of Law.

Before his tenure in the U.S. Attorney’s Office, Ritz clerked for Judge Julia S. Gibbons of the 
United States Court of Appeals for the Sixth Circuit. Between college and law school, Mr. Ritz 
worked for the United States Department of State.

Mr. Ritz received his J.D. from the University of Virginia, his M.S. in Foreign Service from 
Georgetown University, and his B.A. with High Distinction from the University of Virginia, where he 
was a Jefferson Scholar. He is a product of Memphis City Schools and graduated from White Station 
High School. He and his family live in midtown Memphis.

###

For more information, please contact Public Information Officer Cherri Green at (901) 544-4231 or 
cherri.green@usdoj.gov. Follow @WDTNNews on Twitter for office news
and updates.
 

Source: United States Department of Justice News

The Justice Department announced today an agreement to resolve allegations that Lakeland Bank (Lakeland) engaged in a pattern or practice of lending discrimination by “redlining” in the Newark metropolitan area, including neighborhoods in Essex, Somerset and Union counties in New Jersey. This resolution is part of the Justice Department’s nationwide Combating Redlining Initiative and represents the third-largest redlining settlement in department history.

“Financial institutions that refuse to provide mortgage lending services to communities of color not only contribute to the persistent racial wealth gap that exists in this country, but also violate federal law,” said Attorney General Merrick B. Garland. “The agreement with Lakeland announced today represents the Justice Department’s continued commitment to addressing modern-day redlining, and to ensuring that all Americans have equal opportunity to obtain credit, no matter their race or national origin.”

“Ending redlining is a critical step in our work to close the widening gaps in wealth between communities of color and others,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement demonstrates our firm commitment to combating modern day redlining and holding banks and other lenders accountable when they deny people of color equal access to lending opportunities. Through this agreement, we are sending a strong message to the financial industry that we will not stand for discriminatory and unlawful barriers in residential mortgage lending.”

“Redlining creates an unequal playing field that unfairly prevents many persons of color from achieving the dream of home ownership, and this type of systemic and intentional discrimination cannot and will not be tolerated,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “It is wholly unacceptable that redlining persists into the 21st Century, and this case demonstrates our commitment to combating redlining and hold banks and others accountable when they engage in unlawful discrimination. Through this agreement, we are taking a major step forward by removing unlawful and discriminatory barriers in residential mortgage lending.”

Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color or national origin of the residents in those communities. The complaint filed in federal court today alleges that from at least 2015 to 2021, Lakeland failed to provide mortgage lending services to Black and Hispanic neighborhoods in the Newark, New Jersey, metropolitan area, that all its branches were located in majority-white neighborhoods and that its loan officers did not serve the credit needs of Black and Hispanic neighborhoods in and around Newark.

Under the proposed consent order, which is subject to court approval and was filed today in the U.S. District Court for the District of New Jersey along with a complaint, Lakeland has agreed to do the following:

• Invest at least $12 million in a loan subsidy fund for residents of Black and Hispanic neighborhoods in the Newark area; $750,000 for advertising, outreach and consumer education; and $400,000 for development of community partnerships to provide services that increase access to residential mortgage credit.
• Open two new branches in neighborhoods of color, including at least one in the city of Newark; ensure at least four mortgage loan officers are dedicated to serving all neighborhoods in and around Newark; and employ a full-time Community Development Officer who will oversee the continued development of lending in neighborhoods of color in the Newark area.
• Maintain an expanded Community Reinvestment Act Assessment Area that includes Essex, Somerset and Union counties.

Lakeland has agreed to settle this matter without contested litigation and worked cooperatively with the department to remedy the redlining concerns that were identified.

In October 2021, Attorney General Merrick B. Garland launched the Justice Department’s Combating Redlining Initiative, a coordinated enforcement effort to address this persistent form of discrimination against communities of color. The initiative is expanding the department’s reach by strengthening partnerships with U.S. Attorneys’ Offices around the country, regulatory partners and its partners in state Attorneys General offices. Since the initiative was launched, the department has announced four redlining cases and settlements with a combined $38 million in relief for communities that have been the victims of lending discrimination. This includes the $20 million settlement with Trident Mortgage Company — the second largest settlement in Justice Department history.

Additional information about the section’s fair lending enforcement can be found at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291, or submitting a report online. Individuals may also report civil rights violations through https://www.justice.gov/usao-nj/civil-rights-enforcement or call the U.S. Attorney’s Civil Rights Hotline at (855) 281-3339.