HUD filed a complaint alleging that in 2008, 2009 and 2010, Associated “discriminated on the basis of race and national origin by disproportionately denying the loan applications of African-American and Hispanic applicants.” Compared to other lenders, Associated’s lending in majority-minority census tracts was lower than in other neighborhoods, HUD found.
Green Bay-based Associated, the largest bank headquartered in Wisconsin, denies the allegations. The bank hired an outside economic consulting firm to analyze its lending practices, which found no evidence of disparate treatment on a prohibited basis.
The bank signed a conciliation agreement with HUD on Friday. Under the conciliation agreement, Associated will continue some of its newer community lending and education efforts, and has agreed to implement other “enhancements” on a three-year schedule arranged with HUD.
Among the enhancements are fair lending training improvements and additional oversight; new branch locations and loan production offices in or near majority-minority census tracts in Racine, Milwaukee and Chicago; additional special financing programs and inexpensive home repair grants. Associated has agreed to market the programs through targeted outreach and prospective homebuyer education.
The terms of the agreement, along with the bank’s current lending initiatives, are expected to generate about $200 million in new loans to targeted areas over the next three years.
"Associated is pleased to have concluded these discussions and will fully comply with the agreement,” said Philip Flynn, president and chief executive officer. “Doing so aligns with our ongoing commitment to our customers and communities where we do business.
"We agree with HUD that we can improve our performance in some of the communities and neighborhoods we serve. We remain committed to the promotion of home ownership and lending in those areas.”