WASHINGTON — The U.S. Department of Justice announced Tuesday it has reached a settlement with Eagle Bank and Trust Company of Missouri resolving allegations of lending discrimination in St. Louis.
Mike Walsh, the bank’s president and chief executive officer, said Eagle disagreed with the government’s allegations but agreed to the settlement to “put the best interests of the people we serve above any desire to continue discussions in the hopes of reaching a different outcome.”
The “consent decree,” which requires the approval of the U.S. District Court for the Eastern District of Missouri, requires the bank, which has 12 locations in the St. Louis region, to open two new locations to serve predominantly African American neighborhoods in “Northern St. Louis,” the Justice Department announcement said.
The bank also will set aside at least $975,000 for “banking and borrowing activities” to residents and businesses in those neighborhoods.
The agreement came after allegations that the bank had engaged in “redlining,” the practice of denying or avoiding providing credit services to consumers in neighborhoods based on those neighborhoods’ demographic makeup, according to the Justice Department statement.
The Justice Department complaint alleged violations of the Fair Housing Act and the Equal Credit Opportunity Act, laws that prohibit banks from discriminating in mortgage practices based on race.
“The Department of Justice is committed to holding banks accountable for their role in continuing historic trends of residential segregation,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, in a statement explaining the action.
“The practice of redlining violates our laws and harms our communities. We commend Eagle Bank for becoming part of the positive change that must come to the African American neighborhoods in St. Louis. The community partnerships and lending programs that are part of our settlement will bring much-needed investment to communities in northern St. Louis.”
The suit emanated from information passed on by the Metropolitan St. Louis Equal Housing Opportunities Council, a fair-lending advocacy group, and provided to the Federal Deposit Insurance Corporation. The FDIC investigated and referred the information to the Justice Department’s Civil Rights Division.
In 2013, the bank received a “needs to improve” rating from the FDIC on its Community Reinvestment Act evaluation. That act was passed in 1977 to combat redlining.
In a statement, Walsh said that the bank and Justice Department had been in discussions for two years.
“Eagle Bank firmly believes in fair lending practices, as they make us stronger as a bank and help create even stronger communities,” Walsh said. “Throughout the past 100 years, Eagle Bank has been a community partner and engaged corporate citizen in St. Louis. For the past 30 years, we have been repeatedly recognized for our commitment to community engagement and improvement.”
