The U.S. Department of Justice recently announced a significant settlement with Ameris Bank, marking a pivotal moment in the ongoing fight against discriminatory lending practices known as redlining. The settlement of $9 million, related to allegations of redlining in predominantly Black and Hispanic neighborhoods in Jacksonville, Florida, represents a critical step forward in addressing long-standing inequities in the financial sector.
Background of the Case
Ameris Bank, an Atlanta-based institution with nearly $25 billion in assets, was accused of systematically avoiding mortgage underwriting in predominantly Black and Latino communities in Jacksonville and discouraging residents from applying for home loans. This practice, known as redlining, has been illegal for over half a century but continues to have detrimental effects on communities of color across the nation. The settlement with Ameris Bank is part of a broader effort by the Biden administration to address these discriminatory practices through a specialized task force.
Details of the Settlement
As part of the settlement, Ameris Bank, while denying any violation of fair lending laws, agreed to invest $9 million to increase credit opportunities for communities of color in Jacksonville. This includes:
- A $7.5 million investment in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods.
- $900,000 for advertising and outreach targeted toward these neighborhoods.
- $600,000 to develop community partnerships to increase access to residential mortgage credit.
- The establishment of a new branch and the deployment of at least three mortgage loan officers in majority-Black and Hispanic neighborhoods.
- The appointment of a full-time Director of Community Lending to oversee lending in these areas.
The Broader Impact
The settlement, subject to court approval, is part of a larger effort by the Justice Department under Attorney General Merrick Garland to prioritize civil rights prosecutions, including those related to redlining. The Ameris Bank case is the first of its kind brought by the Department of Justice in Florida, signaling a significant shift in addressing systemic discrimination in the lending industry.
The practice of redlining has a long history in the United States, originating from discriminatory practices in the 1930s. It has contributed to a substantial wealth gap between Black and white families, as homeownership is a primary means of building wealth in America. Despite existing laws against redlining, its long-term effects continue to depress property values and net worth in historically marginalized communities.
Conclusion
The Ameris Bank settlement represents not only a financial victory for the affected communities but also a symbolic one. It sends a strong message that discriminatory lending practices will not be tolerated and that the financial sector must be held accountable for equitable practices. This case underscores the need for continuous vigilance and proactive measures to ensure fair access to financial services for all Americans, regardless of race or ethnicity.
