Meghan de St. Aubin
The Fair Housing Justice Center has filed a suit against M&T Bank last week over discriminatory lending practices.
The New York City nonprofit group conducted an investigation during 2013 and 2014 that included nine women of different races who visited a M&T loan office and posed as first-time homebuyers, according to the Buffalo News
In the pre-application tests, the testers asked the lender to help them figure out how much they could afford to purchase before beginning their search and prior to working with a real estate professional. Minority testers were assigned more income, greater assets, fewer debts and better credit scores than their white counterparts.
The FHJC focused on a program offered by M&T called “Get Started,” which offers low down payment options and the ability to finance closing costs.
The FHJC alleged that M&T Bank steered the minority borrowers toward the “Get Started” program and into minority neighborhoods while white borrowers were “often not told about the program or were overtly discouraged from using it.”
Testers contended that they found differences in neighborhoods they were pushed towards and the loan amounts they would be able to qualify for, according to the Buffalo News
M&T is accused of violating the Federal Fair Housing Act by using racial criteria to direct borrowers to certain areas and amounts of mortgages. They are also alleged of violating state and city human rights laws. The lawsuit asks for damages and to put a stop to alleged discrimination, according to FHJC
“The bottom line is that race and national origin appears to be infecting the policies and practices of this lender in a way that limits housing choice, provides unequal information based on race and national origin, and fosters residential segregation,” FHJC’s Executive Director Fred Freiberg said.
According to the lawsuit, the “Get Started” program offered favorable terms if the buyer agreed to locate to a home in federally designated low- to moderate-income areas that are part of a community revitalization effort or in a neighborhood that is more than 50% minority.
Two other banks in Western New York have also faced accusations of lending discriminations.
In response to the lawsuit, M&T spokesman C. Michael Zabel said, “We’ve earned the highest possible scores on 18 straight (Community Reinvestment Act) exams going back to 1982."
M&T Bank is believed to be the 17th largest commercial bank in the United States. As of 2014, M&T Bank had $134.4 billion in assets and more than 700 branches in New York, New Jersey, Pennsylvania, Maryland, Delaware, Florida, Virginia, West Virginia and Washington, D.C.
FHJC describes itself as “dedicated to ensuring that all people have equal access to housing opportunities in the New York region.”