Bank discriminated against blacks and Hispanics in North Carolina, says Justice Department

The First National Bank of Pennsylvania discriminated against blacks and Hispanics who wanted to buy homes in North Carolina for at least four years, the Justice Department revealed Monday, in the latest in a long series of complaints against financial institutions for discriminating against ethnic minorities.

The agency indicated that the FNB will have to pay US$13.5 million to resolve the accusations, of which the majority will go to a fund to subsidize loans for blacks and Hispanics in Charlotte and Winston-Salem, two of the areas where the Department detected discrimination .

In its complaint, the Justice Department said First National closed branches in neighborhoods where blacks or Hispanics were in the majority, refused to provide mortgages to blacks and Hispanics, and ignored entire neighborhoods that could have received mortgage services. The Department further found that other banking institutions of similar size and scope to First National made between two and four times as many loans to ethnic minority people between 2017 and 2021 as First National.

The case stems from the time FNB acquired Yadkin Bank, a regional bank in the Carolinas, in 2017. Although FNB officials maintain that the practice came from Yadkin before the acquisition, the government insists that any bank that buys from another must answer for the actions of the acquired bank.

“The playing field was not level, and that is not what we want for the people of North Carolina”stated Josh Stein, North Carolina State Attorney General.

It is the 13th complaint of discrimination against banks that the Joe Biden administration has filed since 2021. Under Attorney General Merrick Garland, that Department has created a special commission to investigate cases of discrimination against ethnic minorities in the field of financial services, such as Almost no previous government has done so.

The Justice Department brought the largest discrimination case in history in 2023, against Los Angeles-based City National Bank, which it accused of discriminating against blacks and Hispanics in a similar period, from 2017 to 2020.