The Department of Justice today announced a $9 million settlement to resolve allegations that Park National Bank (Park National), headquartered in Newark, Ohio, engaged in a pattern or practice of “redlining” credit discrimination in the area. Columbus Metropolitan. The agreement is part of the Justice Department’s national plan. Fight against the Redlining initiative which Attorney General Merrick B. Garland released in October 2021.
“For too long the doors to homeownership have been closed to Black families and many other people of color due to illegal redlining by banks and other financial institutions,” said Assistant Attorney General Kristen Clarke of the Division of Civil Rights of the Department of Justice. “When banks do not provide equal access to credit services in neighborhoods of color, they engage in modern redlining and exacerbate the racial wealth gap in our country. “The Department of Justice will continue to fight to fulfill the promise of our nation’s fair lending laws while breaking down discriminatory barriers that deny Black people and other people of color access to economic opportunity and homeownership.”
“Let today’s settlement send a very clear message to banks: we will not tolerate discriminatory lending practices and we will hold them accountable,” said U.S. Attorney Kenneth L. Parker for the Southern District of Ohio. “We are committed to enforcing fair lending laws, which require financial institutions to provide equal opportunities to all Americans to obtain home loans and credit. “We take our duty and honor to uphold those laws very seriously.”
Redlining is an illegal practice in which lenders avoid providing credit services to people living in communities of color because of the race, color, or national origin of the residents of those communities. The lawsuit filed today in federal court in the U.S. District Court for the Southern District of Ohio alleges that, from at least 2015 through 2021, Park National failed to provide mortgage loan services by marking majority Black and Hispanic neighborhoods in the Columbus area. Specifically, the lawsuit alleges that all of Park National’s branches and mortgage lenders in the Columbus area were concentrated in majority-white neighborhoods, and that the bank took no meaningful steps to compensate for its lack of physical presence in majority-black neighborhoods. Hispanic communities.
Under the proposed consent order, which was also filed today in federal court and is subject to court approval, Park National agreed to, among other things, do the following:
Invest at least $7.75 million in a loan subsidy fund to increase access to credit for mortgage, home improvement and refinance loans, as well as home equity loans and lines of credit, in neighborhoods of majority black and Hispanic in Columbus area; $750,000 in outreach, advertising, consumer financial education and credit counseling initiatives; and $500,000 in developing community partnerships to serve residents in majority-Black and Hispanic areas that expand access to residential mortgage credit;
Open a new branch and a new mortgage loan production office in majority black and Hispanic neighborhoods in the Columbus area; ensure that a minimum of four mortgage lenders, at least one of which is Spanish-speaking, are assigned to serve these neighborhoods; and maintain the full-time position of Director of Community Housing Lending and Development, who is responsible for overseeing lending in majority Black and Hispanic areas; and
Conduct a community credit needs assessment, a research-based market study, to help identify financial services needs in majority black and Hispanic census tracts in the Columbus area.
Park National worked cooperatively with the department to remedy the redlining concerns that were identified and agreed to resolve this matter without contested litigation.
The Department of Justice Fight against the Redlining initiative is a coordinated law enforcement effort to address this persistent form of discrimination against communities of color. Since the Initiative was launched, the department has announced six foreclosure cases and settlements and secured $84 million in relief for communities of color who have been victims of credit discrimination nationwide. This includes a $31 million agreement with City National Bankthe largest in the history of the Department of Justice.
More information about the department’s Fair Lending application can be found at www.justice.gov/fairhousing. Individuals can report credit discrimination by calling the Department of Justice’s Housing Discrimination Tip Line at 1-833-591-0291 or submit a report online.