The U.S. Justice Department (DOJ) and state of North Carolina have secured a $13.5 million agreement with the First National Bank of Pennsylvania (FNB) to settle claims of redlining in North Carolina. Redlining is a discriminatory practice that involves systematic denial of services to residents of certain geographic areas based on their race.
According to a press release by the DOJ, from 2017 to 2021, the FNB did not provide mortgage lending opportunities to neighborhoods in Charlotte and Winston-Salem that were predominantly Black and Hispanic. The bank, allegedly, limited these loan opportunities, preventing credit seekers from obtaining home loans. FNB reportedly accepted applications from these neighborhoods at a rate two and a half times lower than other lenders in Charlotte and over four times less in Winston-Salem.
The press release also stated that FNB will be required to invest at least $11.75 million in a loan subsidy to increase the availability of home mortgage and home improvement loans for residents in these predominantly Black and Hispanic neighborhoods. Furthermore, the bank has been ordered to open three new branches in these neighborhoods to enhance accessibility. A community lending director will be appointed to oversee the continued development and transition of the bank's lending practices.
Kristen Clarke | assistant attorney general
| usccr.gov
Assistant Attorney General Kristen Clarke of the DOJ's Civil Rights Division said, "This agreement will have a transformative impact for Black and Hispanic communities, providing them with new opportunities to become homeowners, bank in their neighborhoods and create generational wealth." She added, "As we take time across the nation to commemorate Black History Month, we must also create space to acknowledge the ongoing harms caused by structural racism and long-term discrimination. Modern-day redlining is a stain on our economy and underscores the need to keep pushing for equal economic opportunity and racial justice in our country." Clarke further stated that "The Justice Department stands ready to hold banks and financial institutions accountable to ensure that communities of color are not shut out of access to mortgage credit due to modern-day redlining."
