First National Bank of Pennsylvania will settle a case for $13.5 million after joining a long list of financial institutions deemed guilty of racist redlining.
According to ABC News, the U.S. Department of Justice – which established a Redlining Task Force under Attorney General Merrick Garland to address racial discrimination in financial services – found that FNB discriminated against Black and Latino homebuyers in North Carolina for at least four years.
“The playing field isn’t level,” said North Carolina Attorney General Josh Stein, “and that is not what we want for the people of North Carolina.”
Since 2021, the Biden administration has pursued 13 redlining settlements against banks, garnering $122 million since the formation of the task force. The Justice Department filed the most significant redlining case in history against City National Bank in Los Angeles in 2023, finding that the financial institution discriminated against Black and Latino populations from 2017 to 2020.
The DOJ alleged in its complaint that First National shuttered branches in majority-minority communities, neglected to offer mortgage services to prospective Black and Latino customers, and disregarded entire neighborhoods for potential lending.
Lenders with a comparable size and reach to First National lent two to four times as much to borrowers who identified as minorities between 2017 and 2021, per the DOJ.
Most of FNB’s settlement will go into a fund to assist with subsidized loans for Black and Latino borrowers in Winston-Salem and Charlotte, two housing markets where the DOJ discovered discrimination, ABC News reports.
The dispute stems from FNB’s 2017 acquisition of Yadkin Bank, a regional bank in the Carolinas. While the DOJ stated that any bank that purchases another bank should be responsible for the acquired bank’s acts, FNB maintains that the improper activity occurred before the Yadkin merger.
Jennifer Reel, a spokesperson for FNB, said in a statement that the firm disagreed with the DOJ’s conclusions and maintained that it was in complete compliance with state and federal lending rules. However, the bank settled the case “as a good faith effort to avoid prolonged litigation.”
“Modern-day redlining is a stain on our economy,” said Assistant Attorney General Kristen Clarke in the DOJ’s Civil Rights Division, ABC reported, “and underscores the need to keep pushing for equal economic opportunity and racial justice in our country.”
Never miss a beat: Get our daily stories straight to your inbox with theGrio’s newsletter.