DOJ: $107M secured for communities of color in battle against redlining

By Real Estate News

The U.S. Department of Justice (DOJ) announced this week that it has secured $107 million in judgments and enforcement actions against banks and mortgage lenders to combat the practice of lenders’ avoidance of providing credit services to people living or seeking to live in communities of color because of race, color or national origin, otherwise known as “redlining.”

A part of the $107 million total includes a $9 million settlement with Ameris Bank regarding allegations that it had engaged in redlining in predominantly Black and Hispanic neighborhoods in the Jacksonville, Fla. area, which is currently pending court approval.

“As today’s case makes clear, redlining is not just a relic of the past,” said U.S. Attorney General Merrick Garland. “That is why, two years ago this month, the Justice Department launched our Combating Redlining Initiative, and once today’s settlement is approved, that Initiative will have secured more than $100 million for communities across the country that have been harmed by discriminatory lending practices.”

Garland further detailed the settlement and alleged violations of Ameris in public remarks on Thursday, saying that the DOJ complaint “alleges that the bank located its branches in specific areas of Jacksonville to serve majority-white neighborhoods and to avoid serving Black and Hispanic neighborhoods,” Garland said.

“This included failing to open even a single branch in a majority-Black and Hispanic neighborhood in Jacksonville, despite having opened 18 full-service branches in other parts of Jacksonville,” he explained.

Garland added that the initiative’s work “is just the beginning – the Justice Department currently has over two dozen active investigations into redlining, spanning neighborhoods across the country.”

The DOJ launched its Combating Redlining initiative in October 2021, alongside the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB). The agencies pledged to “address fair lending concerns on a broader geographic scale than the DOJ has ever before,” Garland said at the time.

The DOJ also detailed that it would draw on its partnership with the CFPB, as well as with financial regulatory agencies, including the OCC.

With the latest settlement included, Garland added that the DOJ has secured a total of 10 settlements since the launch of the initiative two years ago.

“In each of these cases, we reached resolutions that involved lenders making significant financial investments to remedy their alleged discrimination,” Garland said. “In addition to monetary restitution, our redlining settlements also require lenders to adopt meaningful changes to their business practices to promote fair lending.”

For its part, Ameris said that the settlement does not mean that the bank agrees with the allegations levied by the DOJ.

“We strongly disagree with any suggestion that we have engaged in discriminatory conduct and are confident in our efforts to provide equal access to affordable mortgage products in the Jacksonville community and all the markets we serve,” said Palmer Proctor, CEO of Ameris.

Proctor added that Ameris “cooperated fully with the Department’s inquiry and have entered into this settlement to avoid the distraction of litigation and because we share the Department’s goal of expanding access to homeownership in underserved areas.”

Garland ended his public remarks on Thursday by reiterating the DOJ’s position and forward-looking posture.

“Redlining is unlawful; it is harmful; and it is wrong,” he said. “Lending discrimination has no place in our country. The Justice Department will continue to combat the redlining that harms families and neighborhoods for generations. And we will continue to pursue justice on their behalf.”