A row of framed houses under construction in a file photo. The Consumer Finance Protection Board and the U.S. Department of Justice reached a settlement with a Wisconsin-based mortage company over allegations of redlining in Birmingham. The company said that it feels that "justice did not prevail" in the situation. (Getty Images)

A mortgage company has agreed to pay civil penalties of almost $9 million to settle a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Justice (DOJ) alleging  that the company had discriminated against people living in the predominantly Black neighborhoods in Birmingham.

The two agencies alleged that Fairway Independent Mortgage Insurance Corporation, based in Madison, Wisconsin, had engaged in redlining by failing to provide credit services, especially with respect to housing, for individuals living in communities of color.

“The CFPB and DOJ are holding Fairway accountable for redlining Black neighborhoods,” said CFPB Director Rohit Chopra in a statement. “Fairway’s unlawful redlining discouraged families from seeking loans for homes in Birmingham’s Black neighborhoods.”

Fairway said in a statement on its website that the lawsuit mischaracterized the matter.

“For one, the complaint characterizes Fairway’s actions as willful and reckless, a claim that was mutually rejected by the parties prior to settlement,” according to the statement. “In addition, the complaint characterizes Fairway’s actions as willful and intentional, despite the government agencies’ failure to identify any evidence to support such a claim.”

The company also stated that it has made more loans in majority-Black census tracts than any other non-bank lender with a physical presence in Birmingham, and said it moved to a settlement “to resolve the matter and curb the further expenditure of resources.”

“Fairway is disappointed in this outcome,” the company said in its statement. “We are a company that serves people and have always strived to help everyone achieve the dream of homeownership. Our numbers, our reputation, and our client testimonials prove such. We are equally disappointed in the regulatory and judicial systems over these actions. We feel justice did not prevail in this situation.”

Under the proposed settlement, which requires approval from a federal judge, Fairway would pay a $1.9 million civil penalty to the CFPB’s victims relief fund and provide $7 million to a loan subsidy program that offers people the chance to purchase, refinance and improve their homes in majority Black-neighborhoods.

The lawsuit alleged that Fairway placed all its physical Birmingham retail locations and loan officers in majority white areas without doing the same for places that were majority Black or in communities of color.

“Fairway predominantly directed its marketing and advertising to majority-white areas from 2018 through 2022, while failing to conduct effective marketing and advertising to majority-Black areas in the Birmingham MSA until at least late 2022,” the complaint from the CFPB states.

Through that practice, Fairway had discouraged minorities from obtaining loans, and that the data showed that the company generated a disproportionately low number of loan applications from majority Black areas within the Birmingham metropolitan service area as compared to other, similarly situated lenders.

The complaint states that from 2018 to 2022, the company generated slightly more than 10,000 applications from the Birmingham area, but that only about 4% of the loan applications were from properties in majority-Black areas. Similarly situated companies, it alleged, had more than 12% of their loan applications from the same majority-Black areas.

“Fairway’s peer lenders generated applications for properties in majority-Black areas at over three times the rate of Fairway,” the complaint states.

Fair housing advocates praised the actions of both the DOJ and the Consumer Financial Protection Bureau.

“As a general matter, an argument that says that we can make an individual judgment about any borrower based on where they actually live, or based on their race, or based on anything that is not related to that person’s individual ability to repay and evaluate their collateral, is irrational and banks should not be doing it,” Nestor M. Davidson, faculty Director at the Urban Law Center with Fordham Law School.

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MACON, Ga.-Blue Bird Corporation (Nasdaq: BLBD), the leader in electric and low-emission school buses, today announced that Britton Smith has resigned from his position as President, effective September 28, 2024.

Mr. Smith has decided to step down for personal reasons. The Company respects his decision and wishes him well in his future endeavors. Mr. Smith will step down from the Company’s Board of Directors, effective immediately.

“On behalf of the Board of Directors and the entire Blue Bird team, I want to express our gratitude to Britton for his leadership and contributions to the Company,” said Doug Grimm, Chairman of the Board. “We wish him all the best in the future.”

Following Mr. Smith’s departure, Blue Bird’s current Chief Executive Officer, Phil Horlock, will assume the additional role of President and continue to lead the Company, as he has for nearly 14 years.

“It has been an honor to serve as President of Blue Bird,” said Britton Smith. “My decision to step down is driven by personal reasons and I need to focus on these important aspects of my life at this time. I want to extend my heartfelt thanks to our employees and partners for their support during my tenure.”

Blue Bird remains focused on executing its profitable growth plan, leading in the deployment of clean alternative-powered school buses and delivering value for its shareholders, customers, dealers and employees.

About Blue Bird Corporation:
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world 25 million children twice a day making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird’s complete product and service portfolio, visit www.blue-bird.com.

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