When the Consumer Financial Protection Bureau looked into the Mississippi-based regional bank BancorpSouth, it didn't just review thousands of loan applications. It sent in undercover operatives — some white, some black — who pretended to be customers applying for loans."They had similar credit scores and similar background and situations," says CFPB Director Richard Cordray. "Our investigation had found that BancorpSouth had engaged in illegal redlining in Memphis, meaning refusing to lend into specific areas of the city."That is, neighborhoods where most residents were African-Americans or other minorities. Cordray says on top of that, the bank "charged African-American customers higher interest rates for mortgages than similarly situated white applicants."He also says the bank denied loans to African-American applicants more often than white applicants — nearly twice as often in relative terms, according to the complaint.When regulators get people to pose as customers, it's called
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