US Banking Titan Resolves Federal Scrutiny, Agrees to $13.5 Million Settlement for Alleged Illegal Practices
The US Justice Department and the state of North Carolina have reached a settlement with a major US bank following allegations of discrimination against its community over several years.
According to a press release, the Justice Department accused First National Bank of Pennsylvania (FNB) of redlining predominantly black and Hispanic neighborhoods in Charlotte and Winston-Salem, North Carolina. Redlining involves denying services, often financial, to specific areas based on race or ethnicity. The complaint alleges that between 2017 and 2021, FNB failed to offer mortgage lending services to these communities, with evidence indicating that other lenders processed applications in the same neighborhoods at significantly higher rates. FNB, overseeing $45 billion in assets, primarily operated branches in predominantly white neighborhoods and closed its Winston-Salem branch in 2021, located in a mostly black area.
Additionally, it’s alleged that FNB employed mortgage loan officers from mostly white neighborhoods and did not monitor their loan referrals or marketing material distribution. Attorney General Merrick B. Garland emphasized that lending discrimination violates the law and harms communities, announcing a $13.5 million settlement to expand access to credit services for Black and Hispanic neighborhoods in Charlotte and Winston-Salem. This settlement marks another milestone for the Justice Department’s Combating Redlining Initiative, which has now secured over $122 million in relief nationwide since its launch in 2021. FNB, among the 100 largest banks in the US, maintains approximately 350 branches across several states.
Clever Robot News Desk 12th February 2024