Class Action Alleges Wintrust, Barrington Bank Engage in Racial Redlining with Mortgage Lending Practices

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A proposed class action lawsuit alleges Wintrust Financial Corporation and Barrington Bank & Trust Co., N.A. have discriminated against certain African American consumers on the basis of race amid the mortgage lending process. 

The plaintiff, an African American Illinois resident, alleges in the 16-page complaint that Wintrust, a Chicagoland financial firm, applies residential mortgage policies and practices that “intentionally and disproportionately” discriminate against and harm Black and African American customers. For example, the lawsuit claims Wintrust’s practices for determining customers’ eligibility for home loans, rates, terms and conditions impose high costs and fees on Black and/or African American borrowers, while providing these same consumers with low credits. 

The suit charges that Wintrust has “created artificial, arbitrary, and unnecessary barriers to fair housing opportunities” for Black and/or African American consumers.

Per the complaint, these practices result in racial redlining—the denial of mortgages and home-buying options to Black and/or African American consumers—and reverse redlining—the practice of extending “predatory credit” to Black and/or African American borrowers on less favorable terms and with higher interest rates, costs and fees.

“As a result of Wintrust’s uniform, nationwide policies and practices related to mortgage approvals, interest rate determinations, fees, and costs, Wintrust approves white applicants for home purchase mortgage loans at substantially higher rates than Black and/or African American applicants,” the suit alleges. 

The complaint says that Wintrust in 2020, according to an analysis of nationwide data published under the Home Mortgage Disclosure Act, originated loans to roughly 73 percent of white borrowers who applied for a home purchase through the firm, compared to a little more than 59 percent of Black and/or African American applicants. 

Further, the case alleges Wintrust is “substantially more likely” to deny Black and/or African American consumers’ applications for home purchase loans outright. When Wintrust does approve a Black or African American customer’s home purchase loan application, the suit alleges, it does so on “substantially worse terms” than those offered to non-Black and non-African American borrowers. 

“In sum, Wintrust disproportionately refuses to lend to Black and/or African Americans,” the lawsuit alleges. “But when it does, it charges Black and/or African American borrowers more costs and fees for less credit on worse terms than non-Black, non-African American borrowers, disproportionately excludes Black and/or African American borrowers from refinancing their higher-interest loans, and even when it allows them to refinance, charges them higher costs and fees.” 

The lawsuit looks to represent all Black and/or African American consumers who applied for and/or received credit related to residential real estate from Wintrust or Wintrust Mortgage. 

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