Feb. 5 (UPI) — First National Bank of Pennsylvania has agreed to pay $13.5 million to settle accusations of lending discrimination targeting Black and Hispanic homebuyers in North Carolina, authorities announced Monday.
The Department of Justice and the North Carolina’s attorney general jointly announced the settlement, which comes six years after FNB entered the North Carolina with the purchase of Yadkin Bank.
Investigators accused the institution of illegal “redlining” predominantly Black and Hispanic neighborhoods of Charlotte and Winston-Salem, N.C., in which the bank allegedly avoided providing credit services to people living there due to their race, color or national origin.
“Lending discrimination violates the law and harms communities and entire families for generations,” U.S. Attorney General Merrick Garland said in a statement. “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.”
“When banks discriminate, it means hardworking people can’t buy a house, start a business, or invest in their futures,” added North Carolina Attorney General Josh Stein. “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.”
Under the terms of a consent order, FNB will create a $11.7 million loan subsidy fund targeted for communities of color in the Charlotte and Winston-Salem areas, which will be used to originate loans and assist in down payment and closing costs.
Meanwhile, the bank will open two new branches in Charlotte and another in Winston-Salem to provide financial services to residents of color, hire new staff and devote $750,000 on advertising its services to communities of color.
The bank will also spend $1 million on community partnerships to provide credit and financial services in these areas.
The action was carried out a part of the Department of Justice’s Combatting Redlining Initiative, which was established in 2021 to be the department’s “most aggressive and coordinated enforcement effort to address redlining.”
