The First National Bank of Pennsylvania discriminated against blacks and Hispanics who wanted to buy homes in North Carolina for at least four years, the Justice Department revealed Monday, in the latest in a long series of complaints against financial institutions for discriminating against ethnic minorities.
The agency indicated that the institution will have to pay $13.5 million to resolve the accusations, of which the majority will go to a fund to subsidize loans for blacks and Hispanics in Charlotte and Winston-Salem, two of the areas where the department detected discrimination .
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In its complaint, the Justice Department said First National closed branches in neighborhoods where blacks or Hispanics were in the majority, refused to provide mortgages to blacks and Hispanics, and ignored entire neighborhoods that could have received mortgage services.
In addition, the department found that other banking institutions of similar size and scope to First National made between two and four times as many loans to ethnic minority people between 2017 and 2021 compared to First National’s figures.
The case stems from the time the financial institution acquired Yadkin Bank, a regional bank in the Carolinas, in 2017. Although bank officials maintain that the practice was carried out by Yadkin before the acquisition, the government insists that any bank that buys another must be responsible for the actions of the acquired bank.
“The playing field was not level, and that is not what we want for the people of North Carolina,” said North Carolina Attorney General Josh Stein.
It is the 13th complaint of discrimination against banks that the Joe Biden government has presented since 2021. Under the management of Secretary of Justice Merrick Garland, that department has created a special commission to investigate cases of discrimination against ethnic minorities in the field of services as almost no previous government has done.
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Under a consent order, the bank will create an $11.7 million loan subsidy fund for communities of color in the Charlotte and Winston-Salem areas, which will be used to originate loans and assist with down payments and closing costs.
Meanwhile, the institution will open two new branches in Charlotte and another in Winston-Salem to offer financial services to residents of color, hire new staff and spend $750,000 advertising its services to area communities.
The bank will also spend $1 million on community partnerships to offer credit and financial services in these areas.
The action was carried out as part of an initiative to combat discrimination established by the Department of Justice in 2021 to be the department’s “most aggressive and coordinated effort to address discrimination.”
In a statement, bank spokeswoman Jennifer Reel said the company disagreed with the department’s findings and said the bank believes it was in full compliance with federal and state lending laws. However, the bank decided to reach an agreement to resolve the matter.
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“We cooperated fully in reaching a settlement of this legacy matter as a good faith effort to avoid protracted litigation,” Reel said.
The Justice Department prosecuted the largest discrimination case in history in 2023, against Los Angeles-based City National Bank, which it accused of discriminating against blacks and Hispanics in a similar period, from 2017 to 2020.
With information from The Associated Press y ABC News
2024-02-06 03:12:48
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