Bankers Rush to Settle Redlining Suits as They Chase Big Paydays

A group of veteran bankers and private equity investors in Texas spotted an opportunity as the economy reeled a decade ago. They raised $1 billion, bought up hobbled lenders and called their new bank Cadence.

But by 2017 its 13 branches across Houston were only in majority White neighborhoods, according to a Justice Department lawsuit accusing the firm in August of redlining. The bank quickly settled for $8.5 million as executives put the last touches on their next deal: a $2.8 billion sale to BancorpSouth.

A U.S. crackdown on redlining is coming — and at a particularly awkward time for the ...