announced that it had entered into a settlement with a Philadelphia based bank and
trust company over allegations that the bank had engaged in
unlawful redlining in the Philadelphia metropolitan area. In the Complaint, filed contemporaneously with the
consent order in U.S. District Court for the Eastern District of
Pennsylvania, the DOJ alleges that the bank’s practices
violated the Fair Housing Act (FHA), 42 U.S.C. §§
3601–3619, and the Equal Credit Opportunity Act (ECOA), 15
U.S.C. §§ 1691–1691f, by failing to adequately
service majority-Black and Hispanic neighborhoods in
Philadelphia.
Specifically, DOJ alleged that, the bank excluded
predominantly-Black and Hispanic census tracts from its Community
Reinvestment Act (CRA), 12 U.S.C. §§ 2901-2908,
“assessment areas,” and therefore that it’s lending
practices did not meet the needs of the community that it served.
DOJ alleged that it initiated its investigation after the Federal
Deposit Insurance Corporation (FDIC) referred its findings from the
FDIC’s consumer compliance examination of the bank. DOJ further
alleged that the bank failed to adequately staff branches in
majority-Black neighborhoods with loan officers and did not engage
in meaningful marketing and outreach in minority communities around
Philadelphia. Under the consent order, the bank agreed to establish
a $2.92 Million “Loan Subsidy Fund” for consumers
applying for first mortgages, home improvement loans, and refinance
loans in majority-Black and Hispanic census tracts in the
bank’s lending area. The bank also agreed to spend at least
$125,000 in partnership with community organizations in outreach
and education programs and to spend at least $250,000 on
advertising, outreach, financial edutaion, and credit counseling
within majority-Black and Hispanic census tracts.
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