Source: Reuters
Thanks to North Carolina Attorney General Josh Stein and the U.S. Department of Justice, First National Bank of Pennsylvania (FNB) will pay out $13.5 million for participating in lending discrimination in majority-Black and Hispanic neighborhoods in two major metropolitan areas of North Carolina, Reuters reported.
FNB settled with the state and USDOJ earlier this month, essentially admitting to practicing redlining in the Charlotte and Winston-Salem markets over five years, from 2017 to 2021.
Redlining is “when lenders deny or discourage mortgage applications and loans in neighborhoods based on the race, color, or national origin of people who live there,” according to Reuters.
The settlement addresses claims that FNB and Yadkin Bank, which FNB purchased in 2017, violated the federal Fair Housing Act and Equal Credit Opportunity Act by not providing home loans and other mortgage services during those five years in the two markets.
“The settlement should send a strong message,” Kristen Clarke, assistant attorney general of the Justice Department’s civil rights division, told reporters. “Redlining will not be tolerated.”
Reuters reported that FNB agreed to invest $11.5 million in a loan subsidy fund, donate $1 million to community partnerships, and spend $750,000 on credit counseling, education, outreach and advertising.
The company will also open at least two locations in majority-Black and Hispanic neighborhoods in Charlotte, and one in Winston-Salem.
Court documents showed that the Charlotte and Winston-Salem markets “had a respective 32% and 22% of census tracts in majority-Black and Hispanic areas, but FNB devoted just one of 18 branches in each region to those tracts — and closed the Winston-Salem branch in 2021.”
“When banks discriminate, it means hardworking people can’t buy a house, start a business, or invest in their futures,” said Stein in a press release. “I want every person who calls North Carolina home to have a fair shot, and I’m pleased that this settlement will create better borrowing opportunities for all North Carolinians.”
FNB said it strongly disagreed with the redlining accusations but settled “to avoid prolonged litigation and to maintain our focus on promoting equity and economic prosperity,” spokesperson Jennifer Reel said.
The USDOJ said this settlement was the 12th in the Biden administration’s Combating Redlining Initiative, which began in October 2021.
