First National Bank of Pennsylvania Settles Redlining Charges
The First National Bank of Pennsylvania has reached a settlement with the Justice Department after being accused of discriminating against Black and Latino homebuyers in North Carolina for at least four years. The bank has agreed to pay $13.5 million to settle the redlining charges, with a majority of the funds being allocated to a loan subsidy program for Black and Latino borrowers in Charlotte and Winston-Salem.
The Justice Department's complaint alleges that First National Bank engaged in discriminatory practices by closing branches in majority-minority neighborhoods, failing to provide mortgage services to Black and Latino potential borrowers, and overlooking entire neighborhoods as potential lending opportunities. A comparison with lenders of similar size and scope revealed that First National Bank lagged behind in lending to minority borrowers between 2017 and 2021.
This case stems from First National Bank's 2017 acquisition of Yadkin Bank, a regional bank in the Carolinas. While the bank claims that the discriminatory behavior occurred prior to the acquisition, the Justice Department argues that responsibility should still be upheld for the acquired bank's actions. Ensuring a level playing field for the people of North Carolina is a crucial aspect of this settlement, according to Josh Stein, North Carolina's Attorney General.
Under the leadership of Attorney General Merrick Garland, addressing racial discrimination in financial services has become a top priority for the Justice Department. This settlement marks the 13th redlining case brought by the Biden Administration since 2021. In an unprecedented move, the Justice Department has established a Redlining Taskforce to specifically tackle these issues, demonstrating a commitment to combatting racial discrimination in the financial industry like never before.
In a similar vein, the Justice Department filed the largest redlining lawsuit in history in 2023 against Los Angeles-based City National Bank. This lawsuit found the bank guilty of discriminating against Black and Latino communities over a comparable period, spanning from 2017 to 2020.
The series of redlining settlements and lawsuits initiated by the Biden Administration sends a clear message that discriminatory lending practices will not be tolerated. By holding banks accountable for their actions and providing financial support to marginalized communities, the Justice Department aims to rectify past injustices and create a more equitable financial landscape.
