Cadence Bank, N.A.
Outcome
DOJ and OCC secured a consent order against Cadence Bank for redlining majority-Black and Hispanic neighborhoods in Houston from 2013 to 2017, requiring $5.5 million in community investment and a $3 million OCC civil penalty, in the first action of DOJ's Combating Redlining Initiative.
Details
Cadence Bank, N.A. — Redlining Majority-Black and Hispanic Neighborhoods in Houston (2013–2017)
Outcome: On August 31, 2021, the U.S. District Court for the Northern District of Georgia entered a consent order resolving all claims in United States v. Cadence Bank, N.A. The order required Cadence to invest over $5.5 million to increase credit opportunities in redlined Houston neighborhoods and pay a $3 million OCC civil money penalty, for a combined remedial commitment of approximately $8.5 million.
Cadence Bank, N.A. was the subject of a Department of Justice complaint alleging that from 2013 to 2017, the bank engaged in unlawful redlining in the Houston metropolitan area by avoiding providing credit services to predominantly Black and Hispanic neighborhoods because of the race, color, and national origin of the people living in those neighborhoods. The complaint alleged violations of the Fair Housing Act (42 U.S.C. § 3604) and the Equal Credit Opportunity Act (15 U.S.C. § 1691).
The DOJ's complaint documented that Cadence's branches were concentrated in majority-white neighborhoods, that the bank's loan officers did not serve the credit needs of majority-Black and Hispanic neighborhoods, and that the bank's outreach and marketing systematically avoided those communities. The geographic pattern of Cadence's lending activity reflected a sustained failure to serve a substantial portion of the Houston MSA's population.
The OCC opened the investigation and referred the matter to DOJ after examining Cadence's fair lending practices. The OCC assessed a $3 million civil money penalty for the Fair Housing Act violations. Under the DOJ settlement, Cadence was required to invest over $5.5 million in targeted programs to expand mortgage credit access in the redlined neighborhoods — including a loan subsidy fund, outreach and advertising, and community partnership activities.
The Cadence Bank consent order was announced on September 1, 2021, the same day that DOJ formally launched its Combating Redlining Initiative — a coordinated multiagency effort involving DOJ, CFPB, OCC, Federal Reserve, FDIC, and NCUA to systematically identify and prosecute redlining across the country. The Cadence action was announced as the first resolution under the new initiative, alongside the Trustmark National Bank action in Memphis.
Primary Source: DOJ CRT — United States v. Cadence Bank, N.A.
How Crucible Prevents This
HMDA data analysis mapped against Houston census tract demographics would have identified Cadence's statistically significant underrepresentation of applications and loans in majority-Black and Hispanic neighborhoods relative to peer lenders. A loan officer territory assignment audit comparing coverage areas against demographic maps would have documented the pattern of avoiding minority neighborhoods. Automated peer benchmarking of application volume by census tract racial composition is a standard fair lending tool that a compliance monitoring workflow enforces through scheduled reporting requirements.
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