Breaking Barriers in Lending: Citadel Federal Credit Union’s $6.5 Million Commitment to Philadelphia's Minority Communities

For nearly two decades, a hidden wall kept minority communities in Philadelphia from accessing the lending services they needed. Today, that wall is starting to come down. In a historic move, Citadel Federal Credit Union has committed $6.5 million to address redlining allegations and foster equitable financial opportunities for Black and Hispanic neighborhoods across Philadelphia. In a landmark development, Citadel Federal Credit Union, based in Exton, Pennsylvania, has agreed to a $6.5 million settlement with the U.S. Department of Justice (DOJ) to address allegations of redlining—an illegal practice where lenders deny services to residents of certain areas based on racial or ethnic composition. This marks the DOJ's first redlining settlement involving a credit union, underscoring the agency's commitment to combating discriminatory lending practices across all financial institutions. Background on Redlining and the DOJ's Initiative Redlining has historically marginalized communities of color by restricting their access to essential financial services, thereby impeding opportunities for homeownership and wealth accumulation. Recognizing the enduring impact of such practices, the DOJ launched its Combating Redlining Initiative in 2021, aiming to eradicate discriminatory lending and promote equitable access to credit. Since its inception, the initiative has secured over a dozen settlements with various financial entities, reflecting a concerted effort to address systemic inequities in the financial sector. Details of the Citadel Settlement The DOJ's complaint alleged that from at least 2017 through 2021, Citadel Federal Credit Union failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods in and around Philadelphia. The credit union's branches were predominantly located in majority-White neighborhoods, with none in Philadelphia, which encompasses over 75% of the majority-Black and Hispanic neighborhoods in Citadel's market area. U.S. Department of Justice To resolve these allegations, Citadel has committed to several remedial actions: Loan Subsidy Fund: Invest at least $6 million to increase access to home mortgage, home improvement, and home refinance loans for residents of majority-Black and Hispanic neighborhoods in Philadelphia. Community Partnerships: Allocate at least $250,000 to develop partnerships providing services related to credit, consumer financial education, homeownership, and foreclosure prevention. Advertising and Outreach: Spend at least $270,000 on advertising, outreach, consumer financial education, and credit counseling focused on predominantly Black and Hispanic neighborhoods in Philadelphia. Branch Expansion: Open three new branches in predominantly Black and Hispanic neighborhoods in Philadelphia to enhance accessibility to financial services. Community Lending Officer: Hire a community lending officer to oversee the development of lending in communities of color. These measures aim to rectify past disparities and foster equitable access to financial services within the affected communities. Implications for the Financial Industry This settlement serves as a precedent, signaling that credit unions, alongside banks, are subject to scrutiny under fair lending laws. Assistant Attorney General Kristen Clarke emphasized that this agreement "makes clear our intent to hold all types of lenders accountable for their role in modern-day redlining." U.S. Department of Justice The National Credit Union Administration (NCUA) also highlighted the significance of this settlement. Chairman Todd M. Harper stated, "It signals that federal credit unions must follow fair lending laws... and brings communities who have been discriminated against a step closer to an equitable opportunity to access safe, fair, and affordable financial services." National Credit Union Administration Conclusion The Citadel Federal Credit Union settlement underscores the DOJ's unwavering commitment to eradicating discriminatory lending practices across all financial institutions. It serves as a reminder that equitable access to financial services is a fundamental right, and all lenders must actively work to ensure inclusivity and fairness in their operations. By Jared Benoit   Reuters New Jersey's OceanFirst Bank settles US redlining charges 48 days ago   AP News Mortgage company will pay over $8M to resolve lending discrimination allegations 21 days ago   Reuters DOJ fines mortgage lender Fairway for alleged racial discrimination 20 days ago Sources    

Navigating the Latest Trends in Fake Buyers and WhatsApp Scams: Essential Tips for Real Estate Agents

  August, 31, 2024    By: Jared Benoit In an era where digital communication is central to business operations, real estate agents increasingly rely on platforms like WhatsApp to connect with potential clients. However, with the convenience of these tools comes the risk of encountering scams designed to exploit unsuspecting professionals. Here’s an in-depth look at the latest scam trends and practical advice to help you identify and avoid falling victim to these schemes. Emerging Scam Trends: What to Watch For "I’m Looking for a Realtor for My Boss": A common tactic involves receiving texts from someone claiming to represent a high-profile client or "boss" looking to purchase property. These messages often come with a sense of urgency and a refusal to communicate through traditional means like phone calls. The sender might insist on using WhatsApp exclusively, which should raise red flags. Such interactions often lead to requests for personal information or verification codes under the guise of finalizing deals​(Text Marketing Services, The Fathom Realty). Unsolicited Text Messages: Another trend is receiving unexpected messages from people claiming to be interested in buying or selling property. These messages may ask if you’re the owner of a specific property or if you’d like to sell your home. Sometimes, they’ll offer a loan to help you avoid foreclosure, requesting sensitive information like bank details or even a copy of your ID. These are classic phishing attempts designed to steal personal and financial information​(Text Marketing Services). Frequent Changes in Buyer Requirements: Scammers might express interest in various properties, constantly changing their criteria. Today, they might want a downtown condo, but tomorrow it’s a suburban home. This indecisiveness is a sign that they have no genuine intent to purchase. They might drag out interactions, wasting your time and resources, or even use property viewings as a cover for scouting homes for criminal activities​(BeGreat). Google Voice Verification Scams: One particularly concerning scam involves the request for a Google Voice verification code. The scammer might claim they need this code to finalize a deal or verify your identity, but in reality, they use it to hijack your online accounts. Never share verification codes sent to your phone, especially with someone you’ve only communicated with online​(Boise Regional REALTORS). Pressure to Accept Unusual Payment Methods: Scammers often push for payment through unconventional means like cryptocurrency or wire transfers to offshore accounts. They may offer to pay above market value or make exaggerated claims about their financial situation. Such requests should be met with caution, as these payment methods are difficult to trace and recover once the transaction is complete​(The Fathom Realty). Best Practices to Protect Yourself Verify Identities: Always insist on verifying the identity of potential buyers. This can include requesting government-issued identification, proof of funds, or pre-approval letters from a reputable lender. Utilize online tools and resources to cross-check the information provided by the buyer​(The Fathom Realty). Use Secure Communication Channels: While WhatsApp is convenient, avoid sharing sensitive information through the platform. Encourage clients to use encrypted emails or secure phone calls for discussing financial transactions or legal matters​(The Fathom Realty). Conduct Due Diligence: Before proceeding with any transactions, take the time to research the buyer’s background. Look for inconsistencies in their story or behavior, such as frequently changing requirements or an unwillingness to meet in person​(BeGreat). Educate Your Clients: As a real estate professional, you can help protect your clients by educating them about these scams. Regularly send out updates about the latest scam trends and advise them never to share personal or financial information through unsecured channels​(Text Marketing Services). Trust Your Instincts: If something feels off about a potential buyer, it’s important to trust your instincts. Take a step back, consult with colleagues, and don’t hesitate to walk away from a deal if you suspect it might be fraudulent​(BeGreat). By staying informed and vigilant, you can protect yourself and your clients from the growing number of scams targeting the real estate industry. Remember, the best defense is a proactive approach—educate yourself, implement strict verification processes, and always proceed with caution when dealing with potential buyers online.