Posted by Sterling Hospedales on November 13, 2023

An Atlanta-based bank will enter a $9 million agreement to settle allegations of redlining predominately Black and Hispanic neighborhoods in Jacksonville, Florida, the U.S. Department of Justice said Thursday.

Driving the news: U.S. Attorney General Merrick Garland announced the DOJ has filed a consent decree in federal court involving Ameris Bank following an investigation into its lending practices.

  • Ameris has nearly $25 billion in assets with operations in nine states across the southeast and mid-Atlantic, per the DOJ.
  • Garland said the Justice Department currently has over two dozen active investigations into redlining nationwide.
  • The discriminatory practice entails lenders denying or avoiding providing mortgages or other credit services to neighborhoods based on the race or national origin of the residents of those neighborhoods.

Details: According to the DOJ, Ameris Bank avoided providing mortgage services to majority-Black and Hispanic neighborhoods in Jacksonville from 2016 through 2021.

  • The department also alleged the bank discouraged people seeking credit in those communities from obtaining home loans.

Ameris’ home mortgage lending was focused disproportionately on white areas of Jacksonville, while other lenders generated applications in majority-Black and Hispanic neighborhoods at three times the rate.

  • Although Ameris operates 18 branches in Jacksonville, the bank “has never operated a branch in a majority-Black and Hispanic neighborhood in the city,” the DOJ said.

Zoom in: Under the agreement that a court must approve, Ameris Bank “will invest $9 million to increase credit opportunities for communities of color in Jacksonville.” It will be allocated as such:

  • $7.5 million toward a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods and credit seekers in those communities.
  • $900,000 toward advertising and outreach targeted toward those residents.
  • $600,000 toward devising community partnerships “to provide services that increase access to residential mortgage credit.”

The bank will additionally open a new branch in a majority-Black and Hispanic neighborhood in Jacksonville.

What they’re saying: “Our complaint alleges that Ameris violated the Fair Housing Act and the Equal Credit Opportunity Act, two federal civil rights laws that prohibit discrimination in lending,” Assistant Attorney General Kristen Clarke said.

The other side: “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,” Ameris CEO Palmer Proctor said in a statement.

  • “We 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.”

Background: In October 2021, Garland and Clarke announced the “Combating Redlining Initiative” launch to tackle redlining. 

  • Since the program’s launch, the DOJ said it has secured over $107 million in relief for communities of color that have experienced lending discrimination by banks or other mortgage lending businesses.
  • The DOJ has entered into 10 settlement agreements with banks and mortgage lending institutions to provide credit opportunities to communities of color in Houston, Memphis, Philadelphia, Camden, Wilmington, Newark, Los Angeles, Columbus, Tulsa, and Rhode Island.

Between the lines: In the 1930s, the U.S. government partnered with the private sector to prevent Black Americans and immigrants from owning homes, or redlining. 

  • While explicit rules regulating where people of color live were outlawed in 1968, the legacy of racial segregation in undervalued neighborhoods still reverberates throughout the country.

Don’t forget: Today’s school boundaries in many cities are still linked to a history of housing segregation that goes back to the 1930s.

  • These boundaries largely determine which schools students will attend, and in many parts of the country, they’re reinforcing segregation and inequality, despite years of strides.