A pair of banks in Ohio have agreed to settle allegations of redlining in predominantly black neighborhoods that are located in Ohio and Indiana.
Union Savings Bank is based in Cincinnati, while Guardian Savings Bank is based in nearby West Chester, Ohio. Both banks have the same owners.
A lawsuit filed by the Justice Department alleges that between 2010 and 2014, the banks
engaged in redlining predominantly black neighborhoods.
The alleged
discriminatory practices violated the Fair Housing Act and Equal Credit Opportunity Act.
“Union and Guardian served the credit needs of the residents of predominantly white neighborhoods to a significantly greater extent than they served the credit needs of majority African-American neighborhoods,” the lawsuit alleged. “Those neighborhoods are easily recognized because each of the four metropolitan areas in which the banks operate has long maintained highly-segregated residential housing patterns for African Americans.”
The Justice Department announced Wednesday that the two banks agreed to settle the allegations for $9 million.
The total includes $7 million in a loan subsidy fund to increase the amount of credit that Union and Guardian extend to residents of majority black census tracts. It additionally includes $2 million to be invested in advertising, outreach, financial education and community partnership efforts.
In addition,
Union will open two full-service branches and Guardian will open one loan production office to serve the residents of black neighborhoods.
“The settlement also requires both banks to develop robust internal controls to ensure compliance with fair lending obligations and conduct fair lending training for their employees,” the Justice Department stated.
Both banks voluntarily agreed to the consent order to
avoid the costs and burden of litigation.
