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Berkshire Hathaway settles redlining lawsuit for $20 million

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Warren Buffett's mortgage company Berkshire Hathaway reached a $20 million settlement after being faced with a redlining lawsuit against Black homebuyers.

Video Transcript

RACHELLE AKUFFO: Welcome back. Triple Play is on deck, and my pick is Berkshire Hathaway. But it's based on some news. Trident Mortgage Company, a division of Berkshire's Home Services of America, getting hit with the second largest redlining settlement in history. That's according to the Justice Department.

Now redlining is a discriminatory practice of deliberately putting services, including loans and mortgages, out of reach for residents of certain areas based on race or ethnicity. Now Trident was accused of doing that in minority-majority neighborhoods in Philadelphia, New Jersey, and Delaware.

The $22 million deal includes a $4 million fine going to the Consumer Financial Protection Bureau, as well as funding an $18.4 million loan subsidy program. And that's to increase mortgage credit access primarily in those underserved neighborhoods. Now the stock not moving much today, but the optics and reputational impact not good.

SEANA SMITH: It certainly is not good, Rachelle. We had HUD Secretary Marcia Fudge on the show yesterday talking about discrimination in the housing sector and why it's a priority for the Biden administration. Certainly, the fact that it is prevalent, especially at a time like this.

And I also want to read a quote from CFPB director Rohit Chopra. He said that, quote, "With housing costs so high--" we've been talking about the fact that housing prices still are up just about 20% than they were a year ago. He said, "With housing costs so high, it is critical that illegal discrimination does not put homeownership even further out of reach." So certainly, we will be looking for commentary from Berkshire Hathaway. We know that Warren Buffett, at least, has not spoken out on this issue yet.