A neighborhood financial institution in Rhode Island agreed to pay $9 million to resolve allegations that it engaged in lending discrimination by redlining majority-Black and Hispanic neighborhoods, a U.S. legal professional introduced Wednesday.
A criticism accused Washington Belief Firm of failing to supply mortgage lending providers to majority-Black and Hispanic neighborhoods in Rhode Island from 2016 to 2021. The financial institution was based in 1800, and in keeping with the Justice Division is the oldest neighborhood financial institution within the nation.
Washington Belief CEO Edward O. “Ned” Useful III mentioned the financial institution vehemently denies the allegations. The financial institution entered into the settlement to keep away from the expense and distraction of potential litigation, and to permit the financial institution to focus absolutely on serving the wants of its prospects and communities.
“We consider we now have been absolutely compliant with the letter and spirit of honest lending legal guidelines, and the settlement will additional strengthen our deal with an space that has at all times been essential to us,” Useful mentioned in assertion.
Regardless of increasing throughout the Rhode Island, the financial institution by no means opened a department in a majority-Black and Hispanic neighborhood, investigators mentioned. It relied on mortgage mortgage officers understanding of solely majority-white areas as the first supply for producing mortgage functions.
The criticism additionally alleges that, in comparison with Washington Belief, over the identical six- yr interval, different banks obtained practically 4 instances as many mortgage functions annually in majority-Black and Hispanic neighborhoods within the state.
“Everybody who pursues the American dream has the appropriate to anticipate to be handled equally and with dignity, no matter their race, their background, or zip code,” mentioned Zachary Cunha, U.S. Lawyer for the District of Rhode Island.
As a part of the settlement, the financial institution has agreed to a sequence of steps, together with investing no less than $7 million in a mortgage subsidy fund to extend entry to residence mortgage, residence enchancment, residence refinance and residential fairness loans and contours of credit score for residents of majority-Black and Hispanic neighborhoods within the state.
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