TLDR:
- The Justice Department has accused First National Bank of Pennsylvania of discriminating against Black and Latino homebuyers in North Carolina for at least four years.
- FNB will pay $13.5 million to settle the redlining charges, with the majority of the funds going towards subsidizing loans for Black and Latino borrowers in Charlotte and Winston-Salem.
- The DOJ alleges that FNB closed branches in majority-minority neighborhoods, failed to provide mortgage services to Black and Latino potential borrowers, and ignored entire neighborhoods for potential lending.
- This is the 13th redlining settlement brought by the Biden Administration since 2021, and the largest redlining lawsuit in history was filed against City National Bank in 2023.
The Justice Department has accused First National Bank of Pennsylvania of discriminating against Black and Latino homebuyers in North Carolina for a period of at least four years. The DOJ alleged that the bank closed branches in majority-minority neighborhoods, failed to provide mortgage services to Black and Latino potential borrowers, and ignored entire neighborhoods for potential lending. As a result, FNB will pay $13.5 million to settle the redlining charges, with the majority of the funds going towards subsidizing loans for Black and Latino borrowers in Charlotte and Winston-Salem.
The case stems from FNB’s acquisition of Yadkin Bank in 2017. FNB argues that the discriminatory practices occurred prior to the acquisition, but the DOJ believes that acquiring banks should be held accountable for the actions of the banks they purchase. This settlement marks the 13th redlining settlement brought by the Biden Administration since 2021, indicating a heightened focus on addressing racial discrimination in financial services. Under Attorney General Merrick Garland, the Justice Department has established a Redlining Taskforce to specifically tackle this issue.
In response to the DOJ’s findings, FNB spokesperson Jennifer Reel stated that the bank disagrees with the allegations and believes it was fully compliant with federal and state lending laws. However, FNB chose to settle the case in order to move past the matter. The settlement signals a continued effort by the Biden Administration to combat racially discriminatory lending practices in the banking industry.
