By KIMBERLEY HAAS
Officials at the U.S. Department of Justice announced on Tuesday that they reached a $9 million agreement with an Ohio-based bank to resolve redlining allegations.
Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in certain communities because of their race, color, or national origin.
It is alleged that from at least 2015 to 2021, Park National Bank, headquartered in Newark, Ohio, engaged in the pattern or practice of lending discrimination in the Columbus metropolitan area. The bank’s branches and mortgage lenders were concentrated in majority-white neighborhoods, and company leaders failed to take any meaningful measures to compensate for its lack of physical presence in majority-Black and Hispanic communities, according to a complaint filed in federal court.
According to a press release, Park National Bank’s agreement includes:
- Investing at least $7.75 million to increase access to credit for people in majority Black and Hispanic neighborhoods in the Columbus area, $750,000 in outreach and education initiatives, and $500,000 in developing community partnerships.
- Opening one new branch and one new mortgage loan production office in majority Black and Hispanic neighborhoods in the Columbus area, ensuring that a minimum of four mortgage lenders, at least one of whom is Spanish-speaking, are assigned to serve these neighborhoods.
- Maintaining the full-time position of Director of Community Home Lending and Development.
- Conducting a Community Credit Needs Assessment to help identify the needs for financial services in majority Black and Hispanic census tracts in the Columbus area.
The agreement is part of the Justice Department’s Combating Redlining Initiative that Attorney General Merrick Garland launched in October of 2021.
“Today, we are committing ourselves to addressing modern-day redlining by making far more robust use of our fair lending authorities. We will spare no resource to ensure that federal fair lending laws are vigorously enforced and that financial institutions provide equal opportunity for every American to obtain credit,” Garland said in a statement at the time.
U.S. Attorney Kenneth Parker for the Southern District of Ohio said in statement for Tuesday’s press release that they remain committed to enforcing fair lending laws.
“Let today’s settlement send a very clear message to banks: we will not tolerate discriminatory lending practices and we will hold you accountable,” Parker said.
Leaders at Park National Bank issued their own press release saying that in addition to fully cooperating with officials they have identified proactive steps to connect with borrowers.
“While we disagree with any suggestion that intentional discrimination took place, we are united with the DOJ in our commitment to ensuring equal access to credit for all consumers,” Park Chairman and Chief Executive Officer David Trautman said in a statement.
Trautman said they condemn discrimination in any form.
“We will continue to serve our customers and our communities with the integrity and compassion that have been our hallmark for the past 115 years,” Trautman said.
The press release says that the bank has committed more than $188 million for low-income housing tax credits and participates in down payment assistance programs.
Over the past three years, the bank made more than $150 million in Community Development Loans, according to company leaders.
“Our entire team takes pride in our legacy of corporate citizenship,” Trautman said. “We are proud of the way our lenders provide fair and equitable treatment to all borrowers, and we know we can do more to extend that service to individuals and families pursuing the dream of homeownership.”
According to the bank’s website, they have almost 100 branches and hundreds of ATMs across Ohio, Northern Kentucky, and the Carolinas.
Follow Us On Twitter:
As the retail giant Walmart makes news with their plans to close underperforming locations, urban designers see an opportunity to discuss repurposing retail properties. https://t.co/rddT7KCOIf
— The Mortgage Note (@TheMortgageNote) March 1, 2023
Read More Articles:
Trends: Employees Return To The Office This Year
Lender Targeting Military Families Shut Down By Consumer Financial Protection Bureau