Major US Bank Settles for $13.5 Million in Discrimination Case

Federal Investigation Finds Bank Engaged in Redlining Practices

The US Justice Department and the state of North Carolina have reached a settlement with a major US bank to resolve allegations that the lender discriminated against minority communities for years.

In a press release, the Justice Department says First National Bank of Pennsylvania (FNB) redlined predominantly black and hispanic neighborhoods in Charlotte and Winston-Salem, North Carolina. Redlining is when services – typically financial in nature – are denied to certain areas based on race or ethnicity.

Evidence of Discrimination

The complaint against FNB alleges that the bank failed to provide mortgage lending services to predominantly black and hispanic communities between 2017 and 2021. Evidence includes the fact that other lenders generated applications in the same neighborhoods at two-and-a-half and four times the rate of FNB.

Bank’s Actions and Consequences

FNB, which oversees $45 billion in assets, had its branches located in predominantly white neighborhoods and had closed down its Winston-Salem branch – a mostly black area – in 2021. The bank also allegedly employed mortgage loan officers who were working out of mostly white neighborhoods and wasn’t tracking how they were developing their loan referrals or distributing marketing materials.

Attorney General’s Statement

Attorney General Merrick B. Garland stated, “Lending discrimination violates the law and harms communities and entire families for generations. Today’s settlement will invest $13.5 million in expanding access to credit services for Black and Hispanic neighborhoods in Charlotte and Winston-Salem that for too long have been denied to them.”

Justice Department’s Combating Redlining Initiative

The DOJ’s Combating Redlining Initiative was announced in 2021 and is the department’s “most aggressive and coordinated enforcement effort to address redlining.” The settlement with FNB brings the total relief secured for communities across the country to over $122 million.

FNB’s Profile

FNB has over $45 billion in assets and is one of the 100 largest banks in the US, with approximately 350 branches throughout the District of Columbia, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia.