(StraightNews.org) – The Department of Justice has accused the First National Bank (FNB) of discriminating against black and Latino customers in North Carolina. The DOJ said the bank has done so for at least four years and ordered it to pay $13.5 million, which will be used to subsidize black and Latino borrowers in the state.
The Department’s complaint alleges that the bank closed down branches in predominantly black and Latino areas and failed to provide mortgages to hopeful borrowers. It compared FNB with similar-sized banks, which it found had loaned two to four times as much money to minority customers.
Josh Stein, North Carolina’s Attorney General, said, “The playing field isn’t level, and that is not what we want for the people of North Carolina.”
The accusation against FNB for so-called “redlining” is the 13th made against banks by the Biden administration. Redlining describes refusing to loan money to people who reside in areas and neighborhoods considered poor, so the customer is assumed to pose a financial risk.
The federal government created a Redlining Task Force, led by Attorney General Merrick Garland, in 2021. Since then, the task force has collected $122 million. The largest settlement came from the City National Bank in Los Angeles, which paid out $31 million last year. The DOJ said other banks in LA received six times more loan applications than the City National Bank and concluded that it had discriminated against blacks and Latinos.
The justice department announced the Combatting Redlining Initiative in October 2021, saying the practice is illegal and the new initiative was the “most aggressive and coordinated enforcement effort to address redlining” to date. Redlining is prohibited under the Fair Housing Act and the Equal Credit Opportunity Act, and Mr. Garland said that fair and equal borrowing opportunities are one of the “fundamental promises of our economic system.”
Kristen Clarke of the Justice Department’s Civil Rights Division said redlining is “not a problem from a bygone era” but is “pervasive” today.
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