The Justice Department and the State of North Carolina jointly announced that First National Bank of Pennsylvania (FNB) has agreed to pay $13.5 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods in Charlotte and Winston-Salem, North Carolina.
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Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of residents in those communities.
The complaint alleges, from 2017 through 2021, FNB, including as successor in interest to Yadkin Bank, which it acquired in 2017, failed to provide mortgage lending services to predominantly Black and Hispanic neighborhoods in Charlotte and Winston-Salem, and discouraged people seeking credit in those communities from obtaining home loans.
FNB’s home mortgage lending was focused disproportionately on white areas of Charlotte and Winston-Salem. For example, other lenders generated applications in predominantly Black and Hispanic neighborhoods at two-and-a-half times the rate of FNB in Charlotte and four times the rate of FNB in Winston-Salem.
FNB’s branches in both cities were also overwhelmingly located in predominantly white neighborhoods, with the bank closing its sole branch in a predominantly Black and Hispanic neighborhood in Winston-Salem in 2021.
The complaint further alleges that FNB relied on mortgage loan officers working out of predominantly white areas to generate loan applications and that the bank did not track how its mortgage loan officers developed loan referrals or how they distributed the bank’s mortgage marketing materials.
FNB worked cooperatively with the Justice Department and the State of North Carolina to resolve and remedy the redlining concerns that were identified and agreed to settle this matter without contested litigation.
During the course of the investigation, FNB established a Special Purpose Credit Program to provide greater access to home loans in communities of color across the seven states where it does business and the District of Columbia.
With assets of over $45 billion, FNB is headquartered in Pennsylvania and operates approximately 350 branches throughout the District of Columbia, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia. It is among the 100 largest banks in the United States. ■