Trustmark National Bank
Mississippi
In October 2021, the Department of Justice, CFPB, and OCC announced a settlement with Trustmark National Bank for redlining practices in violation of the Fair Housing Act. The OCC imposed a $4 million civil money penalty as part of the resolution. The action was part of a broader DOJ initiative targeting discriminatory lending, including redlining by depository and non-depository lenders. While Trustmark is not primarily known as a BaaS sponsor bank, the settlement signals heightened federal scrutiny of lending practices that could extend to fintech collaborations and bank-fintech partnerships that rely on the bank charter for loan origination. The DOJ's anti-redlining initiative explicitly encompassed non-depository lenders such as fintechs, suggesting that sponsor banks facilitating fintech lending programs could face similar fair lending scrutiny.
Verified from source: The DOJ, CFPB, and OCC settled a redlining lawsuit against Trustmark National Bank, resolving allegations of lending discrimination by redlining predominantly Black and Hispanic neighborhoods in Memphis, Tennessee. The OCC issued an administrative consent order as part of the settlement.
- Signals broader federal scrutiny of lending practices that could extend to bank-fintech partnerships
- DOJ anti-redlining initiative explicitly targets non-depository lenders including fintechs, raising compliance stakes for BaaS sponsor banks
- Sponsor banks originating loans on behalf of fintech partners may face heightened fair lending examination