Trustmark National Bank

Agency: Consumer Financial Protection Bureau
Date: Oct. 22, 2021
Type: enforcement action
Source: consumerfinance.gov/enforcement/actions/trustmark-national-bank/
Pages: 52
PDFs: 3 documents (links below)

Documents in this case

Consent order · Oct. 2021 · 24 p.
Complaint · Oct. 2021 · 26 p.
Consent order · May 2025 · 1 p.

Case summary

On October 22, 2021, the Bureau, together with the United States Department of Justice (DOJ), filed a complaint and proposed consent order in settlement of claims against Trustmark National Bank (Trustmark), which is headquartered in Jackson, Mississippi. The joint complaint alleged that Trustmark violated the Equal Credit Opportunity Act, Regulation B, and the Consumer Financial Protection Act of 2010. The consent order, which the court entered on October 27, 2021, imposed injunctive relief and a civil money penalty.

On May 20, 2025, the Bureau and the DOJ filed an unopposed motion to terminate the consent order and dismiss with prejudice. On May 21, 2025, the court vacated the October 27, 2021 judgment and dismissed the case with prejudice.

Consent order (Oct. 2021)

PDF of this document (24 pages)

Page 2

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION

UNITED STATES OF AMERICA and ) CONSUMER FINANCIAL PROTECTION ) BUREAU, )

)

Plaintiffs,

) Civil Action No.: 2:21-cv-2664

)

) TRUSTMARK NATIONAL BANK, )

)

Defendant.

) ____________________________________)

CONSENT ORDER

INTRODUCTION

The Parties jointly submit this Consent Order for approval and entry by the Court. The Order resolves all claims of the United States of America (“United States”) and Consumer Financial Protection Bureau (“Bureau”) (collectively “Plaintiffs”) simultaneously filed in a Complaint, alleging that Trustmark National Bank (“Trustmark” or “the Bank”) engaged in a pattern or practice of unlawful redlining in violation of the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601–3619, the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691–1691f, Regulation B, 12 C.F.R. § 1002.1 et seq., and the Consumer Financial Protection Act (“CFPA”), 12 U.S.C. § 5536(a)(1)(A), by discriminating on the basis of race, color, and national origin. Specifically, Plaintiffs allege that Trustmark engaged in illegal redlining by avoiding providing home loans and other mortgage services, and engaged in discrimination and conduct that would discourage mortgage applications from prospective applicants who are residents of or seeking Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 1 of 24 PageID 88

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credit in majority-Black and Hispanic census tracts in the Memphis, Tennessee-Mississippi- Arkansas Metropolitan Statistical Area (“Memphis MSA”).

The Court has jurisdiction over the Parties and subject matter of this action. There have been no factual findings or adjudication in this case. The Parties enter into this Consent Order to voluntarily resolve all claims arising from the conduct alleged in the Complaint. Entry of this Consent Order is in the public interest. The Parties agree that the full implementation of the terms in this Consent Order will provide a resolution to the claims asserted in the Complaint in a manner consistent with Trustmark’s legitimate business interests. The Bank neither admits nor denies any of the allegations in the Complaint except that, for the purposes of this Consent Order, the Bank admits facts necessary to establish this Court’s jurisdiction over it and over the subject matter of this action.

II.

BACKGROUND Trustmark is a national bank headquartered in Jackson, Mississippi. Trustmark offers commercial, consumer, mortgage, and wealth management banking services. Trustmark currently operates 196 branches in Mississippi, Tennessee, Alabama, Texas, and Florida, including 22 branches in the Memphis MSA. As of December 31, 2020, Trustmark had total assets of $16.550 billion. Trustmark is the principal subsidiary of Trustmark Corporation, a holding company. On April 6, 2020, the Office of the Comptroller of the Currency (“OCC”) notified the United States that, based on information gathered during a fair lending examination of Trustmark the OCC initiated in 2018, it had information suggesting that, between 2014 and 2016, Trustmark structured its mortgage operations in the Memphis MSA to avoid providing equal access to credit to residents seeking mortgage loans in majority-minority areas and thereby may have engaged in a pattern or practice of discrimination in violation of the FHA. Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 2 of 24 PageID 89

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On June 9, 2020, the United States notified Trustmark that it was opening an investigation into whether Trustmark had engaged in unlawful redlining in violation of the FHA and ECOA. The Bureau also opened an investigation into this matter. After conducting their own investigations and reviewing the information provided by the OCC, the Plaintiffs contend that, between 2014 and 2018, Trustmark avoided serving the credit needs of and discouraged those residing or seeking credit in majority-Black and Hispanic census tracts in the Memphis MSA from obtaining mortgage loans, while acting to serve the credit needs for mortgage loans in majoritywhite census tracts.

III.

TERMS OF THE ORDER

Lending Practices 1.

Trustmark, including all of its officers, agents, servants, employees, and all other persons in active concert or participation with them who have actual notice of this Consent Order, assignees, and successors in interest, is hereby enjoined from engaging in any act or practice that discriminates on the basis of race, color, or national origin that: (a) violates the FHA in any aspect of a residential real estate-related transaction; or (b) violates ECOA and Regulation B in any aspect of a credit transaction.

Trustmark will ensure that it offers and provides all persons with an equal opportunity to apply for and obtain credit, regardless of the demographic composition of the area in which a person lives or the location of the property securing the loan. 3.

For purposes of this Consent Order, Trustmark’s “Memphis lending area” consists of Shelby County and Fayette County in Tennessee and DeSoto County in Mississippi. 4.

For purposes of this Consent Order, a “majority-Black and Hispanic” census tract is one where more than 50 percent of the residents are identified as either “Black or African Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 3 of 24 PageID 90

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American” or “Hispanic or Latino” by the United States Census Bureau. A “majority-white” census tract is one where more than 50 percent of the residents are identified as “non-Hispanic white” by the United States Census Bureau.

Fair Lending Compliance 5.

Within 90 days of the date this Consent Order is entered (“Effective Date”), Trustmark must conduct a detailed assessment of Trustmark’s fair lending program in the Memphis lending area, specifically as it relates to fair lending obligations and lending in majority- Black and Hispanic census tracts. Trustmark must produce a written report (“Fair Lending Status Report and Compliance Plan”) that includes a review of Trustmark’s existing fair lending policies and practices, an analysis of Trustmark’s policies and practices related to branch locations; loan officers’ solicitation of applications, training, oversight, and compensation; loan officer recruitment, including recruitment of loan officers of color; marketing; and fair lending compliance monitoring.

Within 120 days of the Effective Date, Trustmark will submit the Fair Lending Status Report and Compliance Plan described in Paragraph 5 to the Plaintiffs, subject to nonobjection by Plaintiffs. The Fair Lending Status Report and Compliance Plan will specifically include, at least:

a. A description of steps Trustmark has taken to revise all of Trustmark’s mortgage lending policies and practices that pose redlining risks, including at a minimum, risk that may arise from branch or loan officer office location; types of loan products; and marketing;

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b. The adopted written policies and procedures regarding training and monitoring the activities of loan officers in marketing Trustmark’s mortgage loan products, soliciting, and originating mortgage loans;

c. A description of Trustmark’s formal process for ongoing statistical monitoring of mortgage underwriting, pricing, and redlining risk, including statistical peer analysis of applications and originations from majority-Black and Hispanic census tracts; and d. Steps Trustmark will take to effectively and promptly revise its mortgage lending policies and practices to ensure compliance with ECOA, Regulation B, and the FHA.

If the United States or the Bureau object to any portion of Trustmark’s Fair Lending Status Report and Compliance Plan, Trustmark will make revisions and resubmit its proposal within 14 days of receiving the objection. Trustmark will begin implementation of its Fair Lending Status Report and Compliance Plan within 14 days of receiving non-objections from the Plaintiffs. Any material changes to Trustmark’s Fair Lending Status Report and Compliance Plan are subject to non-objection by the Plaintiffs.

Fair Lending Training 8.

Within 30 days of the Effective Date, Trustmark will provide a copy of the Complaint and Consent Order in this matter to all employees with substantive involvement in mortgage lending, marketing, or fair lending or CRA compliance, or who have management responsibility over such employees; senior management with fair lending and marketing oversight; and members of the Board of Directors (collectively, “the Relevant Bank Staff and Officials”). Trustmark will provide an opportunity for the Relevant Bank Staff and Officials to ask any Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 5 of 24 PageID 92

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questions concerning the Complaint and Consent Order, and the Bank will provide answers. Trustmark will implement a system for each individual to acknowledge that they received a copy of this Complaint and Consent Order and had the opportunity to ask questions. Trustmark will provide a report that includes these acknowledgements to the Plaintiffs, as well as a list of all persons and their titles to whom this Consent Order was delivered within 45 days of the Effective Date.

Trustmark will provide training to the Relevant Bank Staff and Officials on Trustmark’s obligations under ECOA, Regulation B, and the FHA and Trustmark’s obligations under this Consent Order. The training will be conducted by an independent, qualified third-party trainer selected by Trustmark and subject to non-objection by the Plaintiffs. Within 60 days of the Effective Date, Trustmark will submit the qualifications of the third-party trainer to the Plaintiffs for non-objection. Within 30 days of receiving non-objections from the Plaintiffs regarding the independent, qualified third-party trainer, Trustmark will submit the proposed training curriculum to the Plaintiffs for non-objection. Within 30 days of receiving non-objections from the Plaintiffs regarding the proposed training curriculum, Trustmark will deliver the training described in this Paragraph. Trustmark will implement a system for each individual to acknowledge that they completed fair lending training and will provide a report that includes these acknowledgements to the Plaintiffs 30 days after it has delivered the training. 10.

Trustmark will provide the training described in Paragraph 9 annually to the Relevant Bank Staff and Officials. Trustmark will implement a system for each individual to acknowledge that they completed fair lending training. Trustmark will provide a report that includes these acknowledgements to the Plaintiffs within 10 days of the training. Any proposed Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 6 of 24 PageID 93

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changes to the third-party trainer or the training curriculum are subject to non-objection by the Plaintiffs.

11.

Any individual who becomes a Relevant Bank Staff or Official will, within 30 days of beginning the covered position, receive a copy of the Complaint and Consent Order, with the opportunity to ask questions, as discussed in Paragraph 8. Any individual who becomes a Relevant Bank Staff or Official will, within 60 days of beginning the covered position, receive the training discussed in Paragraph 9. Trustmark will implement a system for each such individual to acknowledge that they received a copy of the Complaint and Consent Order, were given the opportunity to ask questions, and that they completed fair lending training. Trustmark will provide a report that includes these acknowledgements to the Plaintiffs no later than 10 days after an individual becomes a Relevant Bank Staff or Official.

12.

Trustmark will bear all costs associated with the trainings.

Community Credit Needs Assessment 13.

Trustmark will submit to the Plaintiffs for non-objection a Community Credit Needs Assessment for majority-Black and Hispanic census tracts within its Memphis lending area. A Community Credit Needs Assessment is a research-based market study to help a lender identify the needs for financial services in an area. This assessment must include the following information about majority-Black and Hispanic census tracts within Trustmark’s Memphis lending area: (1) an evaluation (to include market research and interviews) of residential mortgage credit needs and current lending opportunities available in the area; (2) recent demographic and socioeconomic data; (3) potential strategies for Trustmark to provide residential mortgage lending services in these census tracts; (4) a review of loan products offered by other lenders and their success in the market; (5) an overview of federal, state, and local programs that are available to residents seeking Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 7 of 24 PageID 94

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and obtaining residential mortgage loans; and (6) recommendations that address how each requirement of the Consent Order should be carried out to best achieve the remedial goals of this settlement.

14.

The Community Credit Needs Assessment will be conducted by an independent, qualified third-party consultant selected by Trustmark and subject to non-objection by the Plaintiffs. Within 60 days of the Effective Date, Trustmark will submit the qualifications of the third-party consultant to the Plaintiffs for non-objection. Within 30 days of receiving nonobjections from the Plaintiffs regarding the third-party consultant, Trustmark must submit to the Plaintiffs, for non-objection, a statement of work from the independent third-party consultant describing their methodology for the assessment. Within 60 days of receiving non-objections from the Plaintiffs regarding the statement of work, Trustmark will submit to the Plaintiffs the Community Credit Needs Assessment described in Paragraph 13. 15.

Once the Plaintiffs have non-objected to the Community Credit Needs Assessment, Trustmark will present the Assessment to all Trustmark committees responsible for overseeing fair lending compliance.

16.

Within 60 days of receiving non-objections from the Plaintiffs of the Community Credit Needs Assessment, Trustmark will submit a remedial plan that details, in light of the recommendations made in the Assessment, the actions Trustmark proposes to take to comply with the requirements of the Consent Order (e.g., physical expansion, loan subsidy, community partnerships, and advertising), including specific timeframes and implementations of these actions. The proposals within the remedial plan will be subject to non-objection by the Plaintiffs. Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 8 of 24 PageID 95

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Community Lending Manager 17.

Trustmark already has designated a full-time Community Lending Manager responsible for facilitating and promoting community lending products and activities throughout Trustmark’s service areas with an emphasis on increasing mortgage loan applications for low- and moderate-income borrowers and borrowers of color. Trustmark also has designated a full-time Community Development Manager focused on the Memphis MSA who implements and administers all aspects of Trustmark’s Memphis diverse market strategy to promote and enhance Trustmark’s market visibility in diverse communities. Trustmark must maintain these positions and staff them throughout the term of this Consent Order.

Physical Expansion to Serve Majority-Black and Hispanic Census Tracts

18.

In February 2021, Trustmark opened a full-service branch in a majority-Black and Hispanic census tract in the Memphis MSA. Subject to appropriate regulatory approval, Trustmark must open one new mortgage loan production office (“LPO”). The LPO must be in a retailoriented space in a visible location located in a majority-Black and Hispanic census tract in Trustmark’s Memphis lending area and will have signage that is visible to the general public. The specific site of the LPO will be subject to non-objection by the Plaintiffs. The LPO must provide, at a minimum, the full range of mortgage products typically offered by Trustmark’s mortgage loan officers and community lending specialists, and maintain hours of operation equivalent to Trustmark’s full-service branches. Trustmark will assign at least two mortgage loan officers or community lending specialists office space in this LPO.

19.

Trustmark must make all reasonable efforts to open the LPO within 18 months of the Effective Date. If Trustmark fails to open an LPO within 18 months of the Effective Date, Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 9 of 24 PageID 96

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Trustmark will provide to the Plaintiffs a written proposal describing how it will comply with Paragraph 18.

20.

Trustmark will evaluate future opportunities for expansion within its Memphis lending area, whether by acquisition or opening new branches or LPOs, in consideration of the goals of this Consent Order and the Community Credit Needs Assessment. Trustmark must notify the Plaintiffs of any plans to open or acquire any new branches or other LPOs within its Memphis lending area at the same time that it notifies other regulators. 21.

Within 180 days of the Effective Date, Trustmark will assign no fewer than four mortgage loan officers or community lending specialists office space in branches or LPOs in Trustmark’s existing branch network in majority-Black and Hispanic census tracts.

Loan Subsidy Fund 22.

Trustmark will invest a minimum of $3.85 million in a loan subsidy fund to increase credit for home mortgage loans, home improvement loans, and home refinance loans for consumers applying for loans in majority-Black and Hispanic census tracts in its Memphis lending area. No more than twenty-five percent of the loan subsidy fund may be used for home refinances. 23.

Loan subsidies under the loan subsidy fund can be provided by the following means:

a. a direct grant for the purpose of down payment assistance (when the subsidy is less than the loan balance);

b. a direct grant for the purpose of closing cost assistance; c. payment of mortgage insurance premiums on loans subject to such mortgage insurance; and Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 10 of 24 PageID 97

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d. any other appropriate assistance measures approved by the United States in writing.

No applicant may receive a total subsidy greater than $10,000 per loan. 24.

Under the loan subsidy fund, Trustmark will subsidize loans made to “qualified applicants.” A “qualified applicant” is any applicant who: (a) qualifies for a loan under Trustmark’s underwriting standards; and (b) applies for a loan secured by residential property located in a majority-Black or Hispanic census tract in the Memphis lending area that will serve as the borrower’s primary residence.

25.

No provision of the Consent Order, including any loan subsidy or equivalent program, requires Trustmark to make any unsafe or unsound loan or to make a loan to a person who is not qualified for the loan based upon lawful, nondiscriminatory terms; however, Trustmark may choose to apply more flexible underwriting standards in connection with its programs under this Consent Order. Trustmark’s underwriting standards applied to residents of majority-Black and Hispanic census tracts must be no less favorable than the standards applied in majority-white census tracts.

Community Development Partnership Program

26.

Trustmark will partner with one or more community-based or governmental organizations that provide the residents of majority-Black and Hispanic census tracts in the Memphis lending area with services related to credit, financial education, homeownership, and foreclosure prevention. Trustmark will develop these partnerships in a manner consistent with achieving the goals of the Consent Order. Through these partnerships, Trustmark must spend a minimum of $400,000 over the term of the Consent Order on services to residents of majority- Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 11 of 24 PageID 98

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Black and Hispanic census tracts in the Memphis lending area that increase access to residential mortgage credit.

27.

Within 180 days of the Effective Date, Trustmark will submit a proposal to the United States describing how it will implement the requirements of Paragraph 26. The proposal will include an explanation of its proposed partner(s). The proposal should also describe, to the extent available, Trustmark’s plans to implement the partnership(s), as well as a description of how the partnership(s) will be used to meet the credit needs identified in the Community Credit Needs Assessment. The proposal will be subject to non-objection by the United States. 28.

Trustmark will evaluate the partnership(s) outlined in Paragraph 26 annually, including by considering the Community Credit Needs Assessment, in order to identify any needed changes to the program or better assist residents of majority-Black and Hispanic census tracts in the Memphis lending area in obtaining credit. Trustmark will present a summary of its evaluation and any proposed changes to the United States as part of its annual reporting requirement under Paragraph 48. Any proposed changes will be subject to non-objection by the United States. I.

Advertising, Community Outreach, Consumer Financial Education, and Credit Counseling Initiatives

29.

Trustmark will spend at least $200,000 per year on advertising, outreach, consumer financial education, and credit counseling in the Memphis lending area described in this Section. 30.

Within 180 days of the Effective Date, Trustmark will submit an Advertising, Outreach, and Education Plan (“Outreach Plan”) to the Plaintiffs detailing how it will spend these funds for the period remaining in the term of the Consent Order. The Outreach Plan will include an explanation of why Trustmark selected certain tactics and community partnerships and how Trustmark’s advertising, community outreach, education, and credit counseling initiatives will meet the credit needs identified in the Community Credit Needs Assessment. The Outreach Plan Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 12 of 24 PageID 99

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will be subject to non-objection by the Plaintiffs. If the Plaintiffs object to any portion of the Outreach Plan, Trustmark will make revisions and resubmit its proposal within 14 days of receiving the Plaintiffs’ objection. Trustmark will begin implementation of its Outreach Plan within 14 days of receiving non-objection from the Plaintiffs. 31.

Trustmark will evaluate the strategies outlined in its Outreach Plan annually, including by considering the Community Credit Needs Assessment, in order to identify any changes necessary to better assist residents of majority-Black and Hispanic census tracts in its Memphis lending area in obtaining credit. Trustmark will present a summary of its evaluation and any proposed changes to the Plaintiffs as part of its annual reporting requirement under Paragraph 48. Any proposed changes will be subject to non-objection by the Plaintiffs.

Advertising 32.

Trustmark will endeavor to effectively advertise its residential loan products, including products for which the loan subsidy fund outlined in Section G will be applied, to majority-Black and Hispanic census tracts in its Memphis lending area and will target advertising to generate mortgage loan applications from qualified applicants in these census tracts. Trustmark’s advertising may include print media, radio, Internet advertising, television, direct mail, and any other appropriate medium non-objected to by the Plaintiffs in writing. These advertisements must include similar information to other advertisements by Trustmark. Trustmark must advertise its mortgage lending services and products to majority-Black and Hispanic census tracts in its Memphis lending area at least to the same extent that it advertises its mortgage lending services and products to majority-white census tracts in its Memphis lending area. Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 13 of 24 PageID 100

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33.

Trustmark will create point-of-distribution materials, such as posters and brochures, targeted toward majority-Black and Hispanic census tracts to advertise products and services. Trustmark will place or display these promotional materials in its branch offices. 34.

All of Trustmark’s print advertising and promotional materials referencing residential mortgage loans will contain an equal housing opportunity logo, slogan, or statement. All radio or television advertisements will include an audible statement that Trustmark is an “Equal Opportunity Lender” or “Equal Housing Lender.”

ii.

Outreach 35.

Trustmark will provide four outreach programs per year for real estate brokers and agents, developers, and public or private entities engaged in residential real estate-related business in majority-Black and Hispanic census tracts to inform them of its products and services and to develop business relationships.

36.

Trustmark may underwrite or sponsor non-profit events in support of the majority- Black and Hispanic census tracts in its Memphis lending area that are related to building relationships within those areas and designed to generate applications for home mortgages.

iii.

Consumer Financial Education and Credit Counseling 37.

Trustmark will develop a consumer education program designed to provide information, training, and counseling services about consumer finance to individuals in majority- Black and Hispanic census tracts in its Memphis lending area. 38.

Trustmark will provide a minimum of six seminars per year targeted toward residents in majority-Black and Hispanic census tracts in its Memphis lending area. These seminars will cover credit counseling, financial literacy, and other related education, to help identify and develop qualified loan applicants from those areas. Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 14 of 24 PageID 101

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39.

Trustmark may develop and provide the consumer education seminars described in Paragraphs 37 and 38 in conjunction with the community-based or governmental organization that Trustmark partners with as described in Section H.

40.

Beginning after the Effective Date and during the first year of the term of this Consent Order, Trustmark may conduct the outreach programs and consumer education seminars described in Paragraphs 35, 37, and 38 by hosting in-person events offered at a location reasonably convenient to the attendees or by hosting virtual events. Beginning 12 months after the Effective Date, Trustmark will submit to the Plaintiffs a list of its planned outreach programs and consumer education seminars, specifying whether those events will be in-person or virtual, as part of its annual reporting requirement under Paragraph 48. The virtual nature of these programs and seminars will be subject to non-objection by the Plaintiffs. IV.

CIVIL MONEY PENALTY 41.

Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law described in Part I of this Consent Order and alleged in the Complaint, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Trustmark must pay a civil money penalty of $5 million to the Bureau. Under 12 U.S.C. § 5565(c)(4), the amount Trustmark must pay will be remitted by $4 million upon Trustmark’s satisfaction of its obligation to pay that amount in penalties to the OCC for related conduct.

42.

Within 10 days of the Effective Date, Trustmark must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.

43.

The civil money penalty paid under this Consent Order will be deposited in the Civil Penalty Fund of the Bureau as required by Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d). Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 15 of 24 PageID 102

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44.

Trustmark must treat the civil money penalty paid under this Consent Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Trustmark may not:

claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Consent Order; or b.

seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Consent Order. 45.

To preserve the deterrent effect of the civil money penalty in any private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Trustmark based on substantially the same facts alleged in the Complaint (“Related Consumer Action”), other than the offset regarding payment to the OCC, Trustmark may not argue that it is entitled to, nor may it benefit by, any offset or reduction of any monetary remedies imposed in a Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund. If the court in any Related Consumer Action offsets or otherwise reduces the amount of compensatory monetary remedies imposed against Trustmark based on the civil money penalty paid in this action or based on any payment that the Bureau makes from the Civil Penalty Fund, Trustmark must, within 30 days after entry of a final order granting such offset or reduction, notify the Bureau, and pay the amount of the offset or reduction to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.

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EVALUATING AND MONITORING COMPLIANCE 46.

Trustmark will retain all records related to its obligations under this Consent Order and all activities to carry out this Order. The Plaintiffs have the right to review and copy these records upon request.

47.

Every year, within 30 days of its submission of data to the Federal Financial Institutions Examination Council (“FFIEC”) in accordance with the Home Mortgage Disclosure Act of 1975, 12 U.S.C. §§ 2801–2811, Trustmark will provide this data to the Plaintiffs in the same format, including the record layout.

48.

Beginning 12 months after the Effective Date, Trustmark will submit annual reports to the Plaintiffs on its progress in complying with the terms of the Consent Order and associated plans and programs. The final report will be delivered to the Plaintiffs at least 60 days prior to the expiration of the Consent Order. The reports will provide a complete account of Trustmark’s actions to comply with the Consent Order, Trustmark’s assessment of the extent to which each obligation was met, an explanation of why Trustmark fell short of meeting its goals for any particular component, and recommendations for additional actions to achieve the goals set forth in the Consent Order and associated plans and programs. Trustmark will attach to its reports copies of training materials and advertising and marketing materials distributed under this Consent Order. Trustmark’s Board of Directors and CEO will review and approve the reports. If the Plaintiffs raise any objections to a report, the Parties will have 14 days to confer and resolve their differences. The Parties may mutually agree to additional time to confer, if necessary. If the Parties are unable to resolve their differences, either party may bring the dispute to the Court for resolution. Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 17 of 24 PageID 104

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49.

All material required by this Consent Order will be sent to the United States by email to the Department of Justice attorney(s) assigned to this matter, and by commercial overnight delivery service addressed as follows:

Chief, Housing and Civil Enforcement Section

Civil Rights Division, U.S. Department of Justice

150 M Street NE, 8th Floor

Washington, D.C. 20002

Attn: DJ# 175-41-230

50.

Unless otherwise directed by the Bureau, all material required by this Consent Order will be sent to the Bureau with the subject line, “Re: Trustmark National Bank, Case No. ____ (W.D. Tenn.),” by overnight delivery service or first-class mail to the below addresses and contemporaneously by email to:

[email protected] Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.

Washington, D.C. 20552

and

Regional Director Southeast Region Consumer Financial Protection Bureau 1700 G Street, N.W.

Washington D.C. 20552

VI.

ROLE OF THE FAIR LENDING OVERSIGHT COMMITTEE 51.

Trustmark already has established a Fair Lending Oversight Committee that is responsible for monitoring the Bank’s fair lending risks. The Committee reviews the policies and Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 18 of 24 PageID 105

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procedures that are in place for management of fair lending risks, facilitates communication between management and the Board of Directors, and reports regularly to the Board of Directors. 52.

The Fair Lending Oversight Committee will review all submissions (including plans, reports, programs, policies, and procedures) required by this Order prior to submission to the Plaintiffs.

53.

Until the termination of this Order, the Fair Lending Oversight Committee will be responsible for monitoring and coordinating Trustmark’s adherence to the provisions of this Order. 54.

The Fair Lending Oversight Committee will provide quarterly updates to the Board of Directors on the steps Trustmark has taken and plans to take to comply with this Order. These quarterly updates to the Board will include, but are not limited to, the following: (1) monitoring loan officers’ solicitation and origination of loans in majority-Black and Hispanic census tracts in the Memphis lending area, including the loan subsidy fund described in Section G; (2) Trustmark’s residential mortgage lending performance in the majority-Black and Hispanic census tracts within its Memphis lending area and a comparison of Trustmark’s applications and originations to institutions in the Memphis lending area with a similar volume of residential mortgage lending activity; (3) coordinating Trustmark’s involvement in community lending initiatives and outreach programs; (4) encouraging and developing more lending within majority-Black and Hispanic census tracts; (5) promoting financial education; (6) providing financial counseling; and (7) building relationships with community groups. The applicable quarterly updates will be attached to each annual report required by Paragraph 48.

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VII.

ADMINISTRATION 55.

The requirements of this Consent Order will remain in effect for five years, except as provided in Paragraph 56. Trustmark’s obligations under Paragraphs 1 and 2 of this Order will remain in effect permanently.

56.

If, within five years of the Effective Date, Trustmark has not invested all money in the loan subsidy fund described in Section G, the Consent Order will remain in full effect until three months after Trustmark has invested all the money in the loan subsidy fund and has submitted a final report to the Plaintiffs that demonstrates the fulfillment of this obligation. 57.

Trustmark will maintain all documents and records necessary to demonstrate full compliance with the Consent Order, including all submissions made to the Plaintiffs, until the requirements of Paragraphs 55 and 56 are fulfilled.

58.

Trustmark must make the documents identified in Paragraph 57 available to the Plaintiffs upon the Plaintiffs’ request.

59.

Any time limits for performance may be extended by mutual written agreement of the Parties. Other modifications may be made only upon approval of the Court, by motion by any party. If there are changes in material factual circumstances, the Parties will work cooperatively to discuss and attempt to agree to proposed modifications to the Consent Order. 60.

If disputes arise about the interpretation of, or compliance with, the Consent Order, the Parties will endeavor in good faith to resolve any dispute before bringing it to the Court for resolution. If Trustmark violates any provision of the Consent Order or fails to perform an act required by the Consent Order, the Plaintiffs may move the Court to impose any remedy authorized by law or equity, including attorneys’ fees and costs. Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 20 of 24 PageID 107

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61.

Nothing in the Consent Order excuses Trustmark’s compliance with any currently or subsequently effective provision of law or order of a regulator. 62.

Trustmark will notify Plaintiffs of any development that may materially affect compliance obligations arising under this Order, including but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Trustmark; or a change in Trustmark’s name or address. Trustmark will provide this notice as soon as practicable after learning about the development. 63.

Within 10 days of the Effective Date, Trustmark will: a. Designate at least one telephone number and email, physical, and postal address as points of contact, which Plaintiffs may use to communicate with Trustmark; b. Identify all businesses for which Trustmark is the majority owner, or that Trustmark directly or indirectly controls, by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; and c. Describe the activities of each such business, including the products and services offered, and the means of advertising, marketing, and sales. 64.

Trustmark will report any change in the information required to be submitted under Paragraph 63 as soon as practicable, but in any case, at least 30 days before the change. 65.

This Order is binding on Trustmark, including all of its officers, agents, servants, employees, and all other persons in active concert or participation with them who have actual notice of this Consent Order, assignees, and successors in interest. If Trustmark seeks to transfer or assign all or part of its operations to a successor or assign that intends to carry on the same or Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 21 of 24 PageID 108

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similar business, Trustmark will obtain the written agreement of the successor or assign to obligations under the Consent Order as a condition of sale, merger, or other transfer. 66.

The Parties agree that litigation is not reasonably foreseeable. If any party implemented a litigation hold to preserve information, the party is no longer required to maintain it. Nothing in this Paragraph relieves either party of any other obligations imposed by the Consent Order.

67.

The Parties to this Consent Order will bear their own costs and attorneys’ fees. 68.

The Court will retain jurisdiction over this civil action to enforce the terms of this Consent Order.

SO ORDERED this 27th day of October, 2021.

_/s/ Samuel H. Mays, Jr. _________

SAMUEL H. MAYS, JR.

UNITED STATES DISTRICT JUDGE

Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 22 of 24 PageID 109

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The undersigned hereby apply for and consent to the entry of this Consent Order: For the United States of America: JOSEPH C. MURPHY, JR.

Acting United States Attorney

Western District of Tennessee

/s/ Eileen Kuo

EILEEN KUO (TN Bar No. 027365) Assistant United States Attorney United States Attorney’s Office Western District of Tennessee 167 North Main Street, Suite 800 Memphis, TN 38103

Phone: (901) 544-4231

Fax: (901) 544-4230 [email protected]

KRISTEN CLARKE Assistant Attorney General Civil Rights Division

SAMEENA SHINA MAJEED Chief

JON M. SEWARD Principal Deputy Chief

/s/ Marta Campos

/s/ Samantha Ondrade

MARTA CAMPOS (pro hac vice application pending) SAMANTHA ONDRADE (pro hac vice application pending) Trial Attorneys Housing & Civil Enforcement Section 950 Pennsylvania Ave. NW – 4CON Washington, DC 20530 Phone: (202) 514-4713 Fax: (202) 514-1116 [email protected] [email protected]

For the Consumer Financial Protection Bureau:

CARA PETERSEN Acting Enforcement Director

DAVID RUBENSTEIN Deputy Enforcement Director

CYNTHIA GOOEN LESSER Assistant Deputy Enforcement Director

/s/ Jonathan Reischl

JONATHAN REISCHL (pro hac vice application pending) JEFFREY BLUMBERG (pro hac vice Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 23 of 24 PageID 110

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application pending) NICHOLAS LEE (pro hac vice application pending) BENJAMIN HAZELKORN (pro hac vice application pending) Enforcement Attorneys Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 Phone: (202) 435-9202 [email protected] [email protected] [email protected] [email protected]

For Trustmark National Bank:

/s/ Andrea K. Mitchell ANDREA K. MITCHELL (pro hac vice application pending) Managing Partner

CHRISTOPHER T. NAPIER (pro hac vice application pending) Partner

Mitchell Sandler LLC 1120 20th Street, NW Suite 725 Washington, DC 20036 Telephone: (202) 886-5261 [email protected] [email protected]

Case 2:21-cv-02664-SHM-atc Document 26 Filed 10/27/21 Page 24 of 24 PageID 111

Complaint (Oct. 2021)

PDF of this document (26 pages)

Page 26

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION

UNITED STATES OF AMERICA and )

CONSUMER FINANCIAL PROTECTION ) BUREAU

)

Plaintiffs,

) Civil Action No.: 2:21-cv-2664

)

) JURY DEMAND

) TRUSTMARK NATIONAL BANK, )

)

Defendant.

) ____________________________________)

COMPLAINT INTRODUCTION 1.

Plaintiffs the United States of America and the Consumer Financial Protection Bureau (“Bureau”) bring this action against Trustmark National Bank (“Trustmark” or the “Bank”) under the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601–3619, the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691–1691f, and the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. § 5536(a)(1)(A). Plaintiffs allege that Trustmark engaged in a pattern or practice of unlawful redlining by structuring its business and outreach efforts so as to avoid the credit needs of majority-Black and Hispanic neighborhoods in its residential mortgage lending, and thereby engaging in acts or practices directed at prospective applicants that discouraged those residing in, or seeking credit for properties located in, these neighborhoods from applying for credit.

The FHA and ECOA prohibit creditors, such as banks, from discriminating in home loans on the basis of race, color, national origin, and other characteristics. Under the FHA, it is unlawful to discriminate against any person in making available residential real estate-related Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 1 of 18 PageID 1

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credit transactions, in making available or denying a dwelling, and in the terms, conditions, or privileges of sale of a dwelling or the provision of services in connection with such a sale, on the basis of race, color, national origin, and other characteristics. 42 U.S.C. §§ 3604(a)–(b), 3605(a). Under ECOA and its implementing regulation, Regulation B, 12 C.F.R. pt. 1002, it is unlawful for a creditor to discriminate against an applicant in any aspect of a credit transaction on the basis of race, color, national origin, and other characteristics. 15 U.S.C. § 1691(a); 12 C.F.R. § 1002.4(a). ECOA and Regulation B also prohibit any statements, acts, or practices that would or could discourage on a prohibited basis an applicant or prospective applicant from applying for credit. 15 U.S.C. § 1691(a); 12 C.F.R. § 1002.4(b); 12 C.F.R. pt. 1002, Supp. I, ¶ 1002.4(b)(1). 3.

“Redlining” is one type of discrimination prohibited under the FHA, ECOA, and Regulation B. Redlining occurs when lenders deny or discourage applications or avoid providing loans and other credit services in neighborhoods based on the race, color, or national origin of the residents of those neighborhoods.

From 2014 through 2018 (the “Relevant Time Period”), Trustmark National Bank engaged in a pattern or practice of unlawful redlining. As alleged in detail herein, Trustmark avoided providing home loans and other mortgage services and discouraged applications for credit for properties located in majority-Black and Hispanic neighborhoods in the Memphis, Tennessee- Mississippi-Arkansas Metropolitan Statistical Area (“Memphis MSA”). 5.

Trustmark’s redlining practices included locating and maintaining nearly all its branch locations and mortgage loan officers in majority-white neighborhoods. The locations of these branches were listed on Trustmark’s website. The Bank relied on mortgage loan officers concentrated in majority-white areas as the primary source for generating loan applications and conducting outreach, thereby essentially failing to market and advertise in majority-Black and Hispanic areas. Further, the Bank maintained inadequate internal fair-lending policies and Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 2 of 18 PageID 2

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procedures to ensure that the Bank was positioned to provide equal access to credit to majority- Black and Hispanic neighborhoods. As a result of these practices, the Bank generated disproportionately low numbers of loan applications and home loans from majority-Black and Hispanic neighborhoods in the Memphis MSA compared to similarly-situated lenders. 6.

Trustmark’s conduct and practices were intended to deny, and had the effect of denying those residing or seeking credit for properties located in majority-Black and Hispanic neighborhoods equal access to home loans and otherwise discouraged such individuals from applying for home loans. The Bank’s conduct was not justified by a business necessity and was not necessary to achieve a substantial, legitimate, non-discriminatory interest. JURISDICTION AND VENUE 7.

This Court has subject-matter jurisdiction over this action. The action arises under federal laws, 12 U.S.C. § 5565(a)(1), 42 U.S.C. § 3614(a), 15 U.S.C. § 1691e(h); it presents a federal question, 28 U.S.C. § 1331; and the United States and an agency of the United States bring this action as plaintiffs, 28 U.S.C. § 1345.

Venue is proper in this Court under 28 U.S.C. § 1391 and 12 U.S.C. § 5564(f), and venue is proper in this division, because Trustmark conducts business in, and a substantial part of the events or omissions giving rise to the claims occurred in, this judicial district and division. PARTIES 9.

The United States brings this action to enforce the provisions of the FHA and ECOA. The FHA and ECOA authorize the Attorney General to bring a civil action in federal district court whenever he has reason to believe that an entity is engaged in a pattern or practice of resistance to the full enjoyment of rights secured by the FHA and ECOA. 42 U.S.C. § 3614(a); 15 U.S.C. § 1691e(h). The FHA further authorizes the Attorney General to bring suit where the defendant has denied rights to a group of persons and that denial raises an issue of general public importance. Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 3 of 18 PageID 3

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42 U.S.C. § 3614(a).

10.

The Bureau is an independent agency of the United States charged with regulating the offering and provision of consumer financial products or services under federal consumer financial laws. 12 U.S.C. § 5491(a). The Bureau has independent litigating authority to enforce federal consumer financial laws, 12 U.S.C. § 5564(a), including ECOA. 12 U.S.C. §§ 5481(12)(D), 5481(14).

11.

Defendant Trustmark National Bank is a national bank headquartered in Jackson, Mississippi that offers commercial, consumer, mortgage, and wealth management banking services. The Bank currently operates 196 branches throughout Mississippi, Tennessee, Alabama, Texas, and Florida, including 22 branches in the Memphis MSA. As of December 31, 2020, Trustmark’s total assets equaled $16.550 billion. From 2014 to 2019, the Memphis MSA was consistently in Trustmark’s top three markets for home mortgage lending. 12.

Trustmark is subject to the regulatory authority of the Office of the Comptroller of the Currency (“OCC”). Because its assets exceed $10 billion, Trustmark is also subject to the Bureau’s authority, including enforcement authority. 12 U.S.C. § 5515(c). 13.

Trustmark is subject to the FHA, ECOA, and their respective implementing regulations, 24 C.F.R. pt. 100, and Regulation B.

14.

Trustmark is a “creditor” within the meaning of ECOA, 15 U.S.C. § 1691a(e), and is an entity whose business includes engaging in “residential real estate-related transactions” under the FHA, 42 U.S.C. § 3605.

FACTUAL ALLEGATIONS The Memphis MSA and Trustmark’s Assessment Area 15.

During the Relevant Time Period, the Memphis MSA was comprised of nine counties in three states: Crittenden County in Arkansas; Benton, DeSoto, Marshall, Tate, and Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 4 of 18 PageID 4

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Tunica Counties in Mississippi; and Fayette, Shelby, and Tipton Counties in Tennessee. 16.

The Memphis MSA has over 1.3 million residents. According to data from the United States Census Bureau, in 2018, the region was 45.8 percent non-Hispanic Black (“Black”), 45.4 percent non-Hispanic white (“white”), and 5 percent Hispanic or Latino. Almost 50 percent of census tracts in the Memphis MSA, or 158 tracts, are majority-Black and Hispanic. As used in this Complaint, a “majority-Black and Hispanic” tract is one where more than 50 percent of the residents are identified as either “Black or African American” or “Hispanic or Latino” by the United States Census Bureau. A “majority-white” tract is one where more than 50 percent of the residents are identified as “non-Hispanic white” by the United States Census Bureau.1 17.

Shelby County, Tennessee, where the city of Memphis is located, accounts for a disproportionate share of the Black and Hispanic populations in the Memphis MSA. Shelby County has 221 census tracts, of which 138 tracts, or 62 percent, are majority-Black and Hispanic. 18.

As a depository bank, Trustmark is subject to the requirements of the Community Reinvestment Act (“CRA”), 12 U.S.C. §§ 2901–2908, and its enabling regulations, which require covered banks to meet the credit needs of the communities that they serve. Each bank subject to the CRA self-identifies the communities that it serves in the bank’s “assessment areas.” Federal regulators look at a bank’s assessment area in evaluating whether an institution is meeting the credit needs of its entire community.

19.

Trustmark’s self-designated assessment area consists of three contiguous counties where approximately 83 percent of the Memphis MSA’s population resides: Shelby and Fayette Counties in Tennessee and DeSoto County in Mississippi. The Bank’s assessment area contains 90 percent of the majority-Black and Hispanic census tracts in the entire Memphis MSA.

1 The complaint uses “majority-Black and Hispanic census tract,” “majority-Black and Hispanic area,” and “majority-Black and Hispanic neighborhood” interchangeably. The complaint does the same for “majority-white tract,” “majority-white area,” and “majority-white neighborhood.” Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 5 of 18 PageID 5

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Trustmark’s Memphis MSA Branches Are Concentrated in Majority-White Neighborhoods 20.

During the Relevant Time Period, Trustmark located its branches in the Memphis MSA so as to serve the credit needs of majority-white neighborhoods and avoid serving the credit needs of those residing in or seeking credit for properties located in majority-Black and Hispanic neighborhoods.

21.

During the Relevant Time Period, Trustmark operated between 22 and 25 branches in the Memphis MSA. Eighteen of these branches were “full-service” branches, which offered the full suite of Trustmark’s retail products and services, and at most 7 of these branches were “limitedservice” branches, which offered only some products and services. No “limited-service” branch accepted residential mortgage loan applications.

22.

Although 50% of the census tracts in the Memphis MSA are majority-Black and Hispanic, during the Relevant Time Period, the Bank maintained only 4 of its 25 total branches in majority-Black and Hispanic areas. The remaining 21 branches were located in majority-white neighborhoods. See Exhibit A.

23.

During the Relevant Time Period, 3 of the Bank’s branches located in majority-Black and Hispanic neighborhoods were full-service branches. Two of those 3 branches were established or acquired at a time when the surrounding neighborhoods were majority-white but are now located in majority-Black and Hispanic neighborhoods, due to population-shifting demographics rather than actions by the Bank to serve Black and Hispanic communities. 24.

During the Relevant Time Period, only 1 of the Bank’s 7 limited-service branches was located in a majority-Black and Hispanic neighborhood in the Memphis MSA. The Bank closed that limited-service branch in 2015. Thus, from 2016 through 2018, the Bank operated no limited-service branch in a majority-Black and Hispanic neighborhood in the Memphis MSA. 25.

Trustmark first entered the Memphis MSA market in 1987, acquiring 4 branches in Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 6 of 18 PageID 6

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DeSoto County, Mississippi, all located in majority-white areas. 26.

Trustmark expanded into Tennessee in 2001, acquiring additional branches in Shelby County, all located in majority-white areas.

27.

Since 2001 and through 2018, Trustmark established 4 “de novo” (created, instead of acquired) branches in the Memphis MSA. Three of the 4 branches are located in majority-white areas.

28.

Trustmark knew its branches were not serving the credit needs of majority-Black and Hispanic areas but did not take steps to address this failure for years. 29.

By concentrating nearly all of its branches in majority-white neighborhoods, Trustmark discouraged residents of, or those seeking credit for properties located in, majority- Black and Hispanic neighborhoods from applying for and obtaining home loans and restricted their access to the Bank’s credit and mortgage lending services. Trustmark Concentrated Mortgage Loan Officers and Services in Majority-White Neighborhoods While Neglecting the Mortgage Lending Needs of Majority-Black and Hispanic Neighborhoods

30.

During the Relevant Time Period, Trustmark’s mortgage loan officers served the credit needs of majority-white neighborhoods but did not serve the credit needs of majority-Black and Hispanic neighborhoods in the Memphis MSA, thus discouraging residents of, or those seeking credit for properties located in, majority-Black and Hispanic neighborhoods from applying for and obtaining home loans and restricting their access to the Bank’s credit and mortgage lending services.

31.

During the Relevant Time Period, Trustmark maintained only 3 full-service branches in majority-Black and Hispanic census tracts; the other 15 full-service branches were located in majority-white census tracts. During the Relevant Time Period, the Bank assigned all of its mortgage loan officers to its branches in majority-white areas; it did not assign a single mortgage Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 7 of 18 PageID 7

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loan officer to any of Trustmark’s branches located in majority-Black and Hispanic neighborhoods.

32.

In the majority-white neighborhoods in the Memphis MSA where mortgage loan officers were assigned branch offices, mortgage-lending services were available to walk-in customers. These services were not available in the majority-Black and Hispanic neighborhoods where loan officers were not assigned branch offices.

33.

During the Relevant Time Period, Trustmark relied almost entirely on mortgage loan officers, all of whom were assigned offices in branches in majority-white neighborhoods, to develop referral sources, conduct outreach to potential customers, and distribute marketing materials related to the Bank’s mortgage lending services. 34.

The Bank did not monitor or document where its mortgage loan officers developed referral sources or to whom loan officers distributed marketing or outreach materials related to mortgage lending services to ensure that such sources or distribution occurred in all neighborhoods throughout the Memphis MSA.

35.

The Bank took no meaningful steps to supplement the efforts of mortgage loan officers to generate mortgage loan applications from majority-Black and Hispanic areas in the Memphis MSA.

36.

The Bank’s marketing strategy in the Memphis MSA was focused on developing commercial business, with an emphasis on “brand messaging,” or generic advertising emphasizing Trustmark’s “brand” as a reliable community institution offering an omnibus of products and services. Accordingly, during the Relevant Time Period, the majority of the Bank’s print or digital advertising appeared in business-focused publications, including Chamber of Commerce publications distributed primarily in majority-white neighborhoods, and did not regularly appear in media or platforms accessible to or targeted at majority-Black and Hispanic areas. Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 8 of 18 PageID 8

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37.

Trustmark knew that its focus on commercial advertising and generic brand messaging was ineffective at generating mortgage loan applications from majority-Black and Hispanic areas in the Memphis MSA during the Relevant Time Period. Trustmark’s Inadequate Internal Fair-Lending Monitoring 38.

During the Relevant Time Period, the Bank’s internal fair lending policies and procedures were inadequate to ensure that the Bank was positioned to provide equal access to credit to majority-Black and Hispanic neighborhoods in the Memphis MSA. 39.

Trustmark did not establish internal governance and oversight committees to oversee fair-lending efforts or determine if the Bank was generating loans in majority-Black and Hispanic neighborhoods until August 2018.

40.

Trustmark did not conduct a comprehensive internal fair-lending risk assessment until 2018.

41.

Trustmark did not incorporate fair lending considerations in its branching decisions or in the development of new loan products and services until 2018. Disproportionately Low Numbers of Home Loan Applications from Majority-Black and Hispanic Neighborhoods in the Memphis MSA

42.

43.

Trustmark’s own data on loan applications and originations that it is required to report to regulators under the Home Mortgage Disclosure Act of 1975 (“HMDA”), 12 U.S.C. §§ 2801–2811, confirms that Trustmark has avoided serving majority-Black and Hispanic neighborhoods in the Memphis MSA. See Exhibit B (depicting Trustmark’s applications from majority-Black and Hispanic tracts in the Memphis MSA in 2014 and 2018). Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 9 of 18 PageID 9

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44.

During the Relevant Time Period, Trustmark Bank significantly underperformed its “peer lenders” in generating home mortgage loan applications from majority-Black and Hispanic areas in the Memphis MSA. “Peer lenders” are similarly-situated financial institutions that received between 50 percent and 200 percent of the Bank’s annual volume of home mortgage loan applications.

45.

The disparity between the rate of applications generated by Trustmark and the rate generated by its peer lenders from majority-Black and Hispanic areas is both statistically significant – meaning unlikely to be caused by chance – and sizable across the five-year Relevant Time Period.

46.

During the Relevant Time Period, Trustmark received 3,064 HMDA-reportable mortgage loan applications within the Memphis MSA. Of those applications, 10 percent came from individuals seeking credit for properties located in majority-Black and Hispanic census tracts. By contrast, during the same time period, Trustmark’s peers generated 24 percent of their 68,204 total applications from individuals seeking credit for properties located in these same majority- Black and Hispanic census tracts.

47.

In other words, Trustmark’s peers generated applications from individuals seeking credit for properties located in majority-Black and Hispanic census tracts at almost 2.5 times the rate of Trustmark. When disparities were calculated for individual years, Trustmark’s peers generated applications at a rate between 1.85 and 3.68 times the rate of Trustmark. These disparities are statistically significant – meaning, unlikely to have been produced by chance – across the five-year Relevant Time Period and in every year analyzed. 48.

The statistically significant disparities between applications Trustmark generated from majority-Black and Hispanic neighborhoods and those that its peers generated show that there were individuals seeking credit for properties located in majority-Black and Hispanic areas in the Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 10 of 18 PageID 10

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Memphis MSA. Trustmark had no legitimate, non-discriminatory reason to draw so few applications from these areas.

49.

These figures show a statistically significant failure by Trustmark, relative to its peer lenders, to draw applications for home loans and provide residential mortgage services to residents of, and those seeking credit for properties located in, majority-Black and Hispanic census tracts in the Memphis MSA on a non-discriminatory basis during the Relevant Time Period. Disproportionately Low Number of Mortgage Loans Made in Majority-Black and Hispanic Neighborhoods of the Memphis MSA

50.

Trustmark’s acts and lending policies and practices, including those alleged in Paragraphs 15 to 41, have discouraged applicants and prospective applicants in majority-Black and Hispanic neighborhoods from applying for and obtaining home loans and other mortgagerelated services. As a result, the Bank made a smaller percentage of HMDA-reportable residential mortgage loans in these neighborhoods compared to its peers from 2014 through 2018. See Exhibit C (depicting Trustmark’s loan originations from majority-Black and Hispanic tracts in the Memphis MSA in 2014 and 2018).

51.

From 2014 to 2018, Trustmark made 2,369 HMDA-reportable residential mortgage loans in the Memphis MSA. Of those loans, 8.3 percent were made to residents of majority-Black and Hispanic census tracts. By contrast, Trustmark’s peers made 42,714 HMDA-reportable residential mortgage loans in the same area, of which about 19 percent went to residents of majority-Black and Hispanic census tracts – more than double the rate of Trustmark. 52.

When disparities were calculated for individual years, Trustmark’s peers made loans at a rate between 1.65 and 3.35 times the rate of Trustmark. The disparities are statistically significant across the five-year Relevant Time Period and for each individual year from 2014 to 2018.

53.

The statistically significant disparities between the number of home loans Trustmark Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 11 of 18 PageID 11

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made from majority-Black and Hispanic neighborhoods and those that its peers made show that there were individuals seeking and qualified for credit for properties located in majority-Black and Hispanic areas in the Memphis MSA. Trustmark had no legitimate, non-discriminatory reason to make so few home loans from these areas.

54.

These figures show a statistically significant failure by Trustmark, relative to its peer lenders, to make home loans and provide residential mortgage services to residents of, and those seeking credit for properties located in, majority-Black and Hispanic census tracts in the Memphis MSA on a non-discriminatory basis during the Relevant Time Period.. OCC’s Referral and the United States’ Investigation 55.

In February 2018, Trustmark’s prudential regulator, the OCC, initiated a fair lending examination of Trustmark focused on redlining.

56.

After completing its examination and statistical analyses, the OCC determined that it had information suggesting that, between 2014 and 2016, Trustmark structured its mortgage operations in the Memphis MSA to avoid providing equal access to credit to residents seeking mortgage loans in majority-minority areas and thereby engaged in a pattern or practice of discrimination in violation of the FHA.

57.

By correspondence dated April 6, 2020, the OCC notified the United States Department of Justice and the Bureau of this matter.

58.

On June 9, 2020, the United States notified Trustmark that it was opening an investigation into whether the Bank had engaged in unlawful redlining in violation of the FHA and ECOA and requested documents related to Trustmark’s lending practices for the time period January 1, 2014, to the present.

59.

Trustmark’s discriminatory practices as described herein were intended to discriminate and have had the effect of discriminating on the basis of race, color, and national Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 12 of 18 PageID 12

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origin.

COUNT I – VIOLATION OF THE FAIR HOUSING ACT (By the United States of America)

60.

The United States incorporates all prior paragraphs of the Complaint as if fully set forth herein.

61.

Trustmark’s policies and practices constitute the unlawful redlining of majority- Black and Hispanic communities in the Memphis MSA on account of the racial and national origin composition of those communities. Trustmark’s policies and practices were intended to deny, and had the effect of denying, equal access to home loans to residents of majority-Black and Hispanic communities and those seeking credit for properties located in those communities. The Bank’s conduct was not justified by a business necessity or legitimate business considerations. 62.

Trustmark’s actions as alleged herein constitute: a.

Discrimination on the basis of race, color, and national origin in making available residential real estate-related transactions, or in the terms or conditions of residential real estate-related transactions, in violation of the Fair Housing Act, 42 U.S.C. § 3605(a), and its implementing regulations, 24 C.F.R. §§ 100.110(b), 100.120;

The making unavailable or denial of dwellings to persons because of race, color, and national origin, in violation of the Fair Housing Act, 42 U.S.C. § 3604(a), and its implementing regulations, 24 C.F.R. § 100.50(b)(3); c.

Discrimination on the basis of race, color, and national origin in the terms, conditions, or privileges of the sale or rental of dwellings, or the provision of services or facilities in connection with the sale or rental of dwellings, in violation of the Fair Housing Act, 42 U.S.C. § 3604(b), and its implementing regulations, 24 C.F.R. §§ 100.50(b)(2), 100.65. Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 13 of 18 PageID 13

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63.

Trustmark’s policies and practices as alleged herein constitute: a.

A pattern or practice of resistance to the full enjoyment of rights secured by the FHA; and b.

A denial of rights granted by the FHA to a group of persons that raises an issue of general importance.

64.

Trustmark’s pattern or practice of discrimination was intentional and willful and was implemented with reckless disregard for the rights of individuals based on their race, color, and national origin.

65.

Persons who have been victims of Trustmark’s discriminatory policies and practices are “aggrieved” as defined in 42 U.S.C. § 3602(i), and may have suffered damages as a result of the Bank’s conduct in violation of the Fair Housing Act, as described above. COUNT II –VIOLATION OF THE EQUAL CREDIT OPPORTUNITY ACT (By the United States of America and the Consumer Financial Protection Bureau)

66.

The United States and the Bureau incorporate all prior paragraphs of the Complaint as if fully set forth herein.

67.

Trustmark’s policies and practices as alleged herein constitute unlawful discrimination against applicants and prospective applicants, including by redlining majority-Black and Hispanic communities in the Memphis MSA and engaging in acts and practices directed at prospective applicants that would discourage prospective applicants from applying for credit on the basis of race, color, and national origin in violation of ECOA and Regulation B. 15 U.S.C. § 1691 et seq.; 12 C.F.R. § 1002.4(a)–(b).

68.

Trustmark’s policies and practices as alleged herein constitute a pattern or practice of discrimination and discouragement and resistance to the full enjoyment of rights secured by the Equal Credit Opportunity Act, 15 U.S.C. § 1691e(h). 69.

Trustmark’s pattern or practice of discrimination was intentional and willful and was Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 14 of 18 PageID 14

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implemented with reckless disregard for the rights of individuals based on their race, color, and national origin.

70.

Persons who have been victims of Trustmark’s discriminatory policies and practices are “aggrieved” as defined in 15 U.S.C. § 1691e(i), and may have suffered damages as a result of the Bank’s conduct in violation of the Equal Credit Opportunity Act, as described above. COUNT III – VIOLATIONS OF THE CONSUMER FINANCIAL PROTECTION ACT (By the Consumer Financial Protection Bureau)

71.

The Bureau incorporates all prior paragraphs of the Complaint as if fully set forth herein.

72.

Section 1036(a)(1)(A) of the Consumer Financial Protection Act prohibits a covered person from offering or providing to a consumer any financial product or service not in conformity with “Federal consumer financial law” or otherwise committing any act or omission in violation of a “Federal consumer financial law.” 12 U.S.C. § 5536(a)(1)(A). 73.

The Equal Credit Opportunity Act is a federal consumer financial law. 12 U.S.C. §§ 5481(12)(D), 5481(14).

74.

Trustmark’s violations of the Equal Credit Opportunity Act, described above in Count II, constitute a violation of Section 1036(a)(1)(A) of the Consumer Financial Protection Act. 12 U.S.C. § 5536(a)(1)(A); 15 U.S.C. § 1691c(b).

REQUEST FOR RELIEF WHEREFORE, the United States and the Bureau pray that the Court enter an order that: (1) Declares that the conduct of Defendant Trustmark National Bank violates the Fair Housing Act;

(2) Declares that the conduct of Defendant Trustmark National Bank violates the Equal Credit Opportunity Act;

(3) Enjoins Defendant, its officers, agents, servants, employees, assignees, and Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 15 of 18 PageID 15

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successors in interest, and all other persons in active concert or participation with Defendant, from: A.

Discriminating on account of race, color, or national origin in any aspect of their lending business practices;

Discouraging applicants or prospective applicants on account of race, color, or national origin;

Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of Defendant’s unlawful practices to the position they would be in but for the discriminatory conduct; D.

Failing or refusing to take such affirmative steps as may be necessary to prevent the recurrence of any discriminatory conduct in the future and to eliminate, to the extent practicable, the effects of Defendant’s unlawful practices, and providing policies and procedures to ensure all segments of Defendant’s market areas are served without regard to prohibited characteristics;

(4) Awards monetary damages against Defendant in accordance with 42 U.S.C. § 3614(d)(1)(B); 15 U.S.C. §§ 1691c(a)(9), 1691e(h); and 12 U.S.C. § 5565(c). (5) Assesses a civil money penalty against Defendant in an amount authorized by 12 U.S.C. § 5565(c) and 42 U.S.C. § 3614(d)(1)(C), in order to vindicate the public interest; and (6) Awards the United States and the Bureau any additional relief the interests of justice may require.

Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 16 of 18 PageID 16

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DEMAND FOR JURY TRIAL

The United States and the Bureau demand trial by jury in this action on all issues so triable.

Dated: October 22, 2021

Respectfully submitted,

JOSEPH C. MURPHY, JR.

Acting United States Attorney

Western District of Tennessee

/s/ Eileen Kuo

EILEEN KUO (TN Bar No. 027365) Assistant United States Attorney United States Attorney’s Office Western District of Tennessee 167 North Main Street, Suite 800 Memphis, TN 38103

Phone: (901) 544-4231

Fax: (901) 544-4230 [email protected]

KRISTEN CLARKE Assistant Attorney General Civil Rights Division

SAMEENA SHINA MAJEED Chief

JON M. SEWARD Principal Deputy Chief

/s/ Marta Campos /s/ Samantha Ondrade MARTA CAMPOS (pro hac vice application pending) SAMANTHA ONDRADE (pro hac vice application pending) Trial Attorneys Housing & Civil Enforcement Section 950 Pennsylvania Ave. NW – 4CON Washington, DC 20530 Phone: (202) 514-4713 Fax: (202) 514-1116 [email protected] [email protected]

CARA PETERSEN Acting Enforcement Director

DAVID RUBENSTEIN Deputy Enforcement Director

CYNTHIA GOOEN LESSER Assistant Deputy Enforcement Director

/s/ Jonathan Reischl JONATHAN REISCHL (pro hac vice application pending) JEFFREY BLUMBERG (pro hac vice Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 17 of 18 PageID 17

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Case 2:21-cv-02664 Document 1 Filed 10/22/21 Page 18 of 18 PageID 18

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EXHIBIT A US & CFPB v. Trustmark National Bank

Case 2:21-cv-02664 Document 1-1 Filed 10/22/21 Page 1 of 2 PageID 19

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Mississippi Tennessee Arkansas Poinsett Craighead St.

Francis Crittenden Lee Mississippi Esri, HERE, NPS, Esri, HERE, Garmin, USGS, EPA, NPS Legend Trustmark National Bank Branches Full Service Branch Limited Service Branch Consolidated Closed ACS 2015 Census Data by Census Tracts Black and Hispanic Population Percentage ≤49.9% >50% and ≤79.9% >80% and ≤100% Bank Assessment Area Boundary County Boundary State Boundary Miles Trustmark National Bank Branches as of 2018 (Exhibit A) Percent of Black and Hispanic Population by Census Tracts Bank’s Assessment Area in Memphis MSA Prepared by:

U.S. Department of Justice Civil Rights Division Washington D.C. 20530 Shelby, TN Fayette, TN DeSoto, MS Case 2:21-cv-02664 Document 1-1 Filed 10/22/21 Page 2 of 2 PageID 20

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EXHIBIT B US & CFPB v. Trustmark National Bank

Case 2:21-cv-02664 Document 1-2 Filed 10/22/21 Page 1 of 3 PageID 21

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MISSISSIPPI TENNESSEE ARKANSAS Phillips Phillips Poinsett Craighead St. Francis Crittenden Lee Cross Mississippi Esri, HERE, NPS, Esri, HERE, Garmin, USGS, EPA, NPS Legend 1 Dot = 1 Application Trustmark Bank Application ACS 2015 Census Data by Census Tracts Black and Hispanic Population Percentage ≤49.9% >50% and ≤79.9% >80% and ≤100% Bank Assessment Area Boundary Memphis MSA Area Boundary County Boundary State Boundary Miles Trustmark National Bank Applications in 2014 (Exhibit B) Percent of Black and Hispanic Population by Census Tracts Memphis MSA Prepared by:

U.S. Department of Justice Civil Rights Division Washington D.C. 20530 Date: 7/29/2021 Marshall, MS Tate, MS Tunica, MS Crittenden, AR Tipton, TN DeSoto, MS Fayette, TN Shelby, TN Benton, MS Case 2:21-cv-02664 Document 1-2 Filed 10/22/21 Page 2 of 3 PageID 22

Page 48

MISSISSIPPI TENNESSEE ARKANSAS Phillips Phillips Poinsett Craighead St. Francis Crittenden Lee Cross Mississippi Esri, HERE, NPS, Esri, HERE, Garmin, USGS, EPA, NPS Legend 1 Dot = 1 Application Trustmark Bank Application ACS 2015 Census Data by Census Tracts Black and Hispanic Population Percentage ≤49.9% >50% and ≤79.9% >80% and ≤100% Bank Assessment Area Boundary Memphis MSA Area Boundary County Boundary State Boundary Miles Trustmark National Bank Applications in 2018 (Exhibit B) Percent of Black and Hispanic Population by Census Tracts Memphis MSA Prepared by:

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EXHIBIT C US & CFPB v. Trustmark National Bank

Case 2:21-cv-02664 Document 1-3 Filed 10/22/21 Page 1 of 3 PageID 24

Page 50

MISSISSIPPI TENNESSEE ARKANSAS Phillips Phillips Poinsett Craighead St. Francis Crittenden Lee Cross Mississippi Esri, HERE, NPS, Esri, HERE, Garmin, USGS, EPA, NPS Legend 1 Dot = 1 Origination Trustmark Bank Origination ACS 2015 Census Data by Census Tracts Black and Hispanic Population Percentage ≤49.9% >50% and ≤79.9% >80% and ≤100% Bank Assessment Area Boundary Memphis MSA Area Boundary County Boundary State Boundary Miles Trustmark National Bank Originations in 2014 (Exhibit C) Percent of Black and Hispanic Population by Census Tracts Memphis MSA Prepared by:

U.S. Department of Justice Civil Rights Division Washington D.C. 20530 Marshall, MS Tate, MS Tunica, MS Crittenden, AR Tipton, TN DeSoto, MS Fayette, TN Shelby, TN Benton, MS Case 2:21-cv-02664 Document 1-3 Filed 10/22/21 Page 2 of 3 PageID 25

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MISSISSIPPI TENNESSEE ARKANSAS Phillips Phillips Poinsett Crittenden Lee Mississippi St. Francis Craighead Cross Esri, HERE, NPS, Esri, HERE, Garmin, USGS, EPA, NPS Legend 1 Dot = 1 Origination Trustmark Bank Origination ACS 2015 Census Data by Census Tracts Black and Hispanic Population Percentage ≤49.9% >50% and ≤79.9% >80% and ≤100% Bank Assessment Area Boundary Memphis MSA Area Boundary County Boundary State Boundary Miles Trustmark National Bank Originations in 2018 (Exhibit C) Percent of Black and Hispanic Population by Census Tracts Memphis MSA Prepared by:

Consent order (May 2025)

PDF of this document (1 pages)

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Case 2:21-cv-02664-SHM-atc Document 29 Filed 05/21/25 Pagelofi PagelD

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION

UNITED STATES OF AMERICA and CONSUMER FINANCIAL PROTECTION BUREAU,

Plaintiffs, Civil Action No.: 2:21-cv-2664-SHM/atc TRUSTMARK NATIONAL BANK,

)

V. ) )

)

Defendant. ) )

ORDER TERMINATING CONSENT ORDER AND DISMISSING WITH PREJUDICE

Before the Court is Plaintiffs’ May 20, 2025 unopposed Motion to Terminate Consent Order and Dismiss With Prejudice (D.E. 28). For good cause shown, the Consent Order dated October 27, 2021 is vacated and the case is dismissed WITH PREJUDICE.

SO ORDERED this 21‘ day of May, 2025.

/s/ Samuel H. Mays, Jr.

SAMUEL H. MAYS, JR.

UNITED STATES DISTRICT JUDGE