TLDR:

A major national bank has agreed to pay the state of North Carolina $13.5 million to settle allegations of anti-Black and Hispanic discrimination in mortgage lending. The settlement comes after an investigation by the Biden Administration into the practice of redlining, a policy used to enforce racial segregation in housing. Under the settlement, the bank will also open three new branch offices in heavily minority areas and provide financial education and credit counseling services.

Black and Hispanic individuals in Charlotte and Winston-Salem, North Carolina, faced racially motivated discrimination when attempting to obtain mortgages, according to state and federal officials. The bank responsible for the discrimination, First National Bank, has agreed to pay $13.5 million to settle the allegations. The investigation, led by the U.S. Department of Justice’s Civil Rights Division, found that the bank had been significantly more likely to approve mortgages for white individuals compared to Black or Hispanic individuals. The bank also closed branches in minority neighborhoods and failed to monitor loan officers for racial discrimination.

First National Bank acquired Yadkin Financial, a Raleigh-based bank, in 2017 and continued the discriminatory lending practices under its own banner. The investigation is part of a broader push by the Biden Administration to address redlining, a policy rooted in racial segregation. The settlement is one of many reached by the administration, totaling over $120 million in settlements since 2021. North Carolina Attorney General Josh Stein’s office aided in the investigation and emphasized the importance of providing equal access to credit and homeownership, particularly for communities of color.

In addition to the monetary settlement, First National Bank has committed to opening three new branch offices in heavily minority parts of Charlotte and Winston-Salem. The bank will also offer financial education, credit counseling classes, and other services to the community. The settlement and commitments from the bank aim to rectify the harm caused by redlining and promote equal access to housing and wealth-building opportunities.