Oct. 19 (UPI) — The U.S. Justice Department Thursday said it has reached a $107 million redlining settlement for communities of color nationwide.
Redlining is the practice of racist lending discrimination by banks or other mortgage lenders.
With redlining, according to the Justice Department, lenders avoid providing credit services to people in predominantly Black and Hispanic communities “because of the race, color or national origin of the residents in those communities.”
“As today’s case makes clear, redlining is not just a relic of the past,” said Attorney General Merrick Garland in a statement. “That is why, two years ago this month, the Justice Department launched our Combating Redlining Initiative, and once today’s settlement is approved, that Initiative will have secured more than $100 million for communities across the country that have been harmed by discriminatory lending practices.”
As part of the overall settlement, the Justice Department reached a $9 million agreement with Ameris Bank that resolves allegations that Ameris engaged in a pattern of redlining Black and Hispanic neighborhoods in Jacksonville, Fla.
Under the agreement, Ameris will invest $7.5 million in a loan subsidy fund that will be made available to residents of majority Black and Hispanic neighborhoods, open a new branch in a Jacksonville Black and Hispanic neighborhood, and make sure that at least three mortgage officers are dedicated to serve those neighborhoods, among other requirements.
Garland said the anti-redlining work is just beginning and more than two dozen redlining investigations currently are underway across the country.
In the Ameris Bank case, the Justice Department said the bank avoided providing mortgages in the majority-Black and Hispanic neighborhoods while it focused disproportionately on white areas.
“Combating modern-day redlining is one of the most important strategies for ensuring equal economic opportunity today,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division in a statement. “By taking on the discriminatory lending practices of banks and mortgage companies, we are helping to ensure that more Black, Hispanic, and other communities of color are able to buy a home, generate wealth, and fulfill the American Dream.”
The Justice Department said redlining has a significant effect on the health and wealth of people in the communities that suffered this discrimination.
Gaps in home ownership rates contribute to what the department called “staggering” gaps in family wealth between Black and Hispanic families compared with white families.
Median wealth of a Black family is $45,000, according to the Justice Department and for Hispanics it’s $62,000 compared with $285,000 for a white family.
