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prominent Midwest lender, Draper & Kramer Mortgage Corporation, has agreed to a significant settlement with federal authorities over allegations of discriminatory lending practices. The company will face a five-year ban on lending and pay a $1.5 million civil penalty to resolve claims of redlining in the Chicago and Boston metro areas.

    According to the Consumer Financial Protection Bureau, Draper & Kramer engaged in practices that denied mortgage services to certain neighborhoods based on racial or ethnic demographics. The agency found that the company strategically placed its offices in majority-white neighborhoods and focused marketing efforts there, discouraging residents of predominantly Black and Hispanic neighborhoods from applying for loans.

    The bureau alleged that Draper & Kramer failed to provide adequate training or incentives for loan officers to support applicants in underserved areas, resulting in a disproportionately low number of mortgage applications and approvals. The company denied the allegations, calling them "meritless," but chose to settle to resolve the matter quickly.

    This case follows a similar regulatory action against Townstone Financial in 2020, which was accused of discouraging Black applicants through marketing practices. Draper & Kramer's settlement is subject to court approval and marks another step towards addressing discriminatory lending practices in the industry.