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Today: Jun 14, 2024

DOJ mandates $13.5M settlement as First National Bank redlines.

1 min read

The Department of Justice (DOJ) has ordered First National Bank of Pennsylvania to pay $13.5 million to settle charges of discrimination against Black and Latino homebuyers in North Carolina. The DOJ alleges that the bank closed branches in majority-minority neighborhoods, failed to provide mortgage services to Black and Latino potential borrowers, and ignored entire neighborhoods for lending opportunities. The settlement fund will be used to subsidize loans for Black and Latino borrowers in Charlotte and Winston-Salem. This is the 13th redlining settlement brought by the Biden Administration since 2021.

The DOJ found that lenders of similar size and scope to First National did significantly more lending to minority borrowers between 2017 and 2021, highlighting the bank’s discriminatory practices. The case stems from FNB’s acquisition of Yadkin Bank in 2017, with FNB claiming that the discriminatory behavior occurred before the acquisition. However, the DOJ argues that acquiring banks should be held responsible for the actions of the banks they acquire.

The settlement is part of the DOJ’s efforts to address racial discrimination in financial services. Under Attorney General Merrick Garland, a Redlining Taskforce has been established to focus on racial discrimination in the industry. In 2023, the DOJ brought the largest redlining lawsuit in history against City National Bank, finding similar discrimination against Black and Latino communities over a three-year period. The DOJ’s actions are aimed at creating a more level playing field and combating racial discrimination in lending practices.