The Department of Justice announced May 5 that it had reached a settlement with Citizens Republic Bancorp Inc. and Citizens Bank of Flint, Mich., in a lawsuit alleging a pattern of practice of lending discrimination, or "redlining," in Detroit in violation of the Fair Housing Act and the Equal Credit Opportunity Act. United States v. Citizens Republic Bancorp et al., No. 11-cv-11976, settlement announced (E.D. Mich. May 5, 2011). The settlement remains subject to approval by the U.S. District Court for the Eastern District of Michigan.

The case illustrates the perpetual tension in fair lending: balancing the need to serve traditionally underserved areas with the increased underwriting standards that are being demanded by regulators and investors. As underwriting standards become more strict, as many suspect they will under the Dodd-Frank Act, this tension may become even more acute.