KleinBank has reached a settlement agreement with the federal government, which alleged the bank engaged in mortgage lending discriminating against minorities — known as redlining.
Under the agreement terms, the Chaska-based bank with 21 branches will open a new branch in Minneapolis, according to KleinBank CEO Doug Hile. He added he believes the operation will be successful. The litigation has been particularly costly for the company.
“It’s unfortunate, a lawsuit had been filed,” Hile said, adding that in the 111 years of operating, the bank has never been sued before by the government. “It is what it is and we think this compromise is a good thing for everybody.”
Resources will not be diminished from other KleinBank locations, Hile said. “We’re not going to neglect the areas that we've been serving over the years.”
“As part of the settlement, the parties have agreed to jointly seek dismissal of the lawsuit, which the department filed in the U.S. District Court for the District of Minnesota in 2017,” a U.S. Department of Justice press release stated.
“While we continue to disagree with the DOJ's claim and believe that it has no basis in fact, we have decided this compromise allows us to channel our resources into serving the community, specifically where the needs are great and where our special approach to engagement and commitment will have a profound impact,” Hile noted, in a KleinBank press release.