A North-Central Indiana mortgage lender is heading into a federal review with a fair-housing group pressing regulators to examine what it says are years of racial and economic disparities in home lending. Across five counties, the group says First Federal Savings Bank made only 20 mortgage loans to Black borrowers from 2023 through 2025, even though Black residents make up 7% of the regional population.
The Fair Housing Center of Central Indiana submitted a performance analysis Monday to the Office of the Comptroller of the Currency, asking the agency to intervene in the bank’s upcoming Community Reinvestment Act exam, according to WIBC 93.1 FM. FHCCI Executive Director Amy Nelson said the concerns span mortgage originations, approval rates, application volume and branch placement in Elkhart, Fulton, Kosciusko, Marshall and St. Joseph counties.
The timing matters because First Federal Savings Bank of Rochester is listed for an August 2026 CRA evaluation in the OCC exam schedule. The agency says public comments received before an evaluation closes will be considered, giving the FHCCI filing a formal place in the regulatory process.
First Federal is the region’s eighth-largest mortgage lender, receiving roughly 800 to 900 applications and originating 600 to 800 mortgages annually. The data described in WIBC’s report show that just 1% of the bank’s originations went to Black borrowers, compared with 4% among the region’s 30 largest peer lenders, while Hispanic borrowers received 5% of loans compared with an 11% peer average.
The analysis also found that 90% of First Federal’s loans went to white borrowers, although white residents represent 73% of the five-county population. Only 2% of the bank’s total mortgage lending, or 46 loans, took place in majority non-white census tracts, and the FHCCI said more than half of those loans went to white buyers purchasing in those neighborhoods.
Low- and moderate-income borrowers also appear to be receiving a smaller share of the bank’s lending than the local market would suggest. FHCCI said LMI households make up 54% of area households, but First Federal issued 34% of its mortgages to those borrowers from 2023 through 2025, compared with 41% among peer lenders; the organization’s broader lending work focuses on these kinds of branch, application and HMDA disparities.
The Denial Rates Are The Sharpest Flashpoint
FHCCI’s analysis found First Federal denied 12.5% of Black applicants compared with 4.5% of white applicants. Among applicants with debt-to-income ratios below 36%, the denial gap was 8% for Black applicants versus 3% for white applicants, widening to 15% versus 4% among LMI applicants with the same debt-to-income profile.
Nelson wrote that the pattern may indicate lower-income Black applicants are being scrutinized more heavily than comparable white applicants. The analysis also pointed to the bank’s physical footprint, saying only one of its area branches is located in a majority non-white census tract, while the remaining locations are predominantly in white, middle- to upper-income areas.
What The CRA Review Could Do
FHCCI is urging the OCC to weigh the findings in First Federal’s CRA rating and require corrective steps, including expanded branch access, more targeted outreach, partnerships with community organizations and specialized products for first-time and first-generation homebuyers. The group also called for a more diverse mortgage lending staff, noting that its visual review found zero Black loan officers among the bank’s 12 mortgage loan officers.
The CRA review is not itself a lawsuit or a finding that First Federal violated fair-lending laws. It is a regulatory assessment of whether a federally insured institution is meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, as explained by the FDIC’s CRA overview.
First Federal’s own website says the bank has six branches across Northern Indiana and considers itself a leading mortgage lender in the state. Its July 31, 2023, OCC performance evaluation gave the bank an overall Satisfactory CRA rating, making the pending examination a potentially important test of whether regulators view the newer lending data as evidence of a deeper problem.
The OCC has acknowledged receiving the public comments. Under the agency’s process, those comments can become part of the record considered during the August examination, leaving First Federal’s lending patterns and community access under a brighter federal spotlight.
