Justice Department’s Initiative Secures $107 Million in Relief for Redlining Victims

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Stacy M. Brown

Published: 23 October 2023

The Justice Department’s Combating Redlining Initiative announced the recovery of over $107 million in relief for communities of color nationwide who have long suffered from unfair lending practices. Within the sum, the Department unveiled a $9 million agreement with Ameris Bank, aimed at rectifying allegations of redlining primarily in Black and Hispanic neighborhoods in Jacksonville, Florida.

Redlining, a prohibited practice, involves lenders withholding credit services from individuals in communities of color based on race, ethnicity, or national origin.

Increasing financial opportunities

“Today’s case underscores that redlining remains a contemporary issue,” Attorney General Merrick B. Garland said in a news release, emphasizing the initiative’s ongoing importance. “The Justice Department is committed to rectifying the harm caused by discriminatory lending practices, with over two dozen active investigations underway across the nation.”

In October 2021, Garland launched the Combating Redlining Initiative, marking the Department’s most comprehensive endeavor to combat this systemic issue. The initiative collaborates with U.S. Attorneys’ Offices, federal financial regulatory agencies, and state Attorneys General offices to enforce federal fair lending laws, including the Fair Housing Act and the Equal Credit Opportunity Act.

Since its inception, officials have secured ten settlements with financial institutions, facilitating increased credit access for communities of color in various cities, including Houston, Memphis, Philadelphia, and Jacksonville. The DOJ said the settlements have empowered marginalized communities, enabling them to pursue homeownership, a right unjustly denied them for far too long.

Modern-day redlining

Ameris Bank later reached a resolution in the U.S. District Court for the Middle District of Florida, contingent on court approval. The DOJ’s complaint alleged that Ameris Bank deliberately excluded majority-Black and Hispanic neighborhoods in Jacksonville from its mortgage services, steering applicants away from home loans. The bank’s lending focus disproportionately favored white areas of the city.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division stressed the significance of combating modern-day redlining, noting that it fosters equal economic opportunity and enables communities of color to fulfill the American Dream.

“Combating modern-day redlining is one of the most important strategies for ensuring equal economic opportunity today,” Clarke stated. “By taking on the discriminatory lending practices of banks and mortgage companies, we are helping to ensure that more Black, Hispanic, and other communities of color are able to buy a home, generate wealth, and fulfill the American Dream. This settlement marks a new pinnacle in our efforts to bring an end to redlining and provides.”

U.S. Attorney Roger B. Handberg for the Middle District of Florida heralded the agreement with Ameris Bank as a historic moment, signaling a positive shift for Black and Hispanic communities previously denied vital economic resources.

“For far too long, redlining has negatively impacted communities of color across our country,” Handberg asserted. “Today’s agreement with Ameris Bank represents the first redlining case brought by the Department of Justice in the state of Florida and signals a step forward for Black and Hispanic communities in Jacksonville that were previously denied access to economic resources for generations. This settlement means that Ameris Bank will provide financial remedies to Jacksonville’s underserved communities, and it demonstrates our commitment to guaranteeing equal access to housing and credit resources for all Americans.”

Under the proposed consent order, Ameris Bank will invest $9 million to expand credit opportunities in Jacksonville. This includes a $7.5 million loan subsidy fund for residents of majority-Black and Hispanic neighborhoods, $900,000 for targeted outreach, and $600,000 for community partnerships to bolster access to residential mortgage credit. Additionally, Ameris Bank will open a branch in a majority-Black and Hispanic neighborhood, allocate at least three mortgage loan officers to serve these communities, and implement comprehensive compliance measures.

This article was originally posted to NNPA