Major US Bank Settles $13.5 Million Lawsuit Over Discriminatory Practices
The US Justice Department and the state of North Carolina have reached a settlement with First National Bank of Pennsylvania (FNB) following allegations of racial discrimination against the bank’s community. The Justice Department accused FNB of redlining predominantly black and hispanic neighborhoods in Charlotte and Winston-Salem, North Carolina, by denying them mortgage lending services. The complaint stated that other lenders generated significantly more applications in the same neighborhoods compared to FNB. Additionally, FNB was accused of employing mortgage loan officers who worked primarily in white neighborhoods and not tracking their loan referrals or marketing materials distribution. As part of the settlement, FNB will pay $13.5 million to expand credit services for black and hispanic neighborhoods.
DOJ’s Combating Redlining Initiative
The settlement is a result of the DOJ’s Combating Redlining Initiative, which was launched in 2021 to address redlining practices. This initiative aims to combat lending discrimination and has already secured over $122 million in relief for communities across the country. Attorney General Merrick B. Garland emphasized that lending discrimination violates the law and has long-lasting negative effects on families and communities. While this settlement is a step forward, Garland acknowledged that there is still work to be done in combating discrimination in lending.
About First National Bank of Pennsylvania
FNB is one of the 100 largest banks in the US, with over $45 billion in assets and approximately 350 branches across several states. The bank had its branches located in predominantly white neighborhoods and closed down its Winston-Salem branch, which served a mostly black area. With this settlement, FNB aims to rectify its discriminatory practices and improve access to credit services for underserved communities.
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