According to officials, the agreement with Ameris Bank was the department's most recent redlining settlement since the Combating Redlining Initiative was introduced in October 2021. In all, banking institutions in Jacksonville, Los Angeles, Houston, Memphis, Philadelphia, Newark, Columbus, Ohio, and the state of Rhode Island have agreed to pay $107 million in fines and restitution to federal authorities.
On Thursday morning, the Department of Justice filed a complaint against Ameris Bank as well as a proposed settlement in federal court in Florida. According to the complaint, Ameris Bank discouraged people in Jacksonville's predominantly Black and Hispanic neighborhoods from applying for house loans between 2016 and 2021 and avoided doing business with them. The majority-Black and Hispanic neighborhoods of Jacksonville, which make up roughly 20% of the bank's service region, are home to none of the bank's eighteen branches.
The Justice Department claims that the competitors of Atlanta-based Ameris Bank, which has operations in nine states, received three times as many applications in these neighborhoods with a predominance of Black and Hispanic residents. Its assets are estimated by the Justice Department to be worth roughly $25 billion.
Ameris Bank refuted the Justice Department's redlining accusations in a statement, claiming that it was signing into the arrangement to avert legal action.
CEO Palmer Proctor stated, "We are confident in our efforts to provide equal access to affordable mortgage products in the Jacksonville community and all the markets we serve. We strongly disagree with any suggestion that we have engaged in discriminatory conduct." "We fully cooperated with the Department's investigation and entered into this settlement because we support the Department's objective of increasing access to homeownership in underserved areas and to avoid the distraction of litigation."
A judge must approve the settlement, which requires the bank to open a new branch in an area with a high concentration of Black and Hispanic residents and assign three loan officers to work with these populations. In addition, it has to spend $900,000 on advertising that targets communities with a majority of Black and Hispanic people and $7.5 million on a loan subsidy fund for those residents.
"Redlining is not merely a thing of the past, as demonstrated by the example of today. As Garland stated in his statement, "In fact, some of the neighborhoods that we claim Ameris redlined are some of the same neighborhoods that federal agencies originally redlined beginning in the 1930s." "Moreover, the harm caused by redlining affects not just the people and communities affected by it now, but also the generation after them."
Black families lose out on generational riches due to redlining.
Senior Justice officials have attributed their attention on redlining cases to the nation's widening economic disparity and rising racial inequality. They contend that the federal investigations ought to make it abundantly evident to banks that lending discrimination will not be permitted by the department.
Garland left Wednesday afternoon for Jacksonville. According to aides, he decided to personally make the announcement outside of Washington in order to draw attention to the redlining campaign and demonstrate its advancement. At the announcement were U.S. Attorney for the Middle District of Florida Roger Handberg, the senior prosecutor in the Jacksonville area, and Assistant Attorney General Kristen Clarke, who is in charge of the civil rights division.
In addition, mortgage bankers neglected to assist communities of color, and marketing and outreach initiatives were focused on White communities, according to Clarke's research of Ameris's lackluster outreach to neighborhoods of color. Lastly, we assert that Ameris failed to take any corrective effort to mitigate the risk and engage with Jacksonville's communities of color while knowing for years that it was redlining Black and Hispanic areas.
In 2021, Garland cautioned that these practices are still commonplace more than 90 years later by citing the history of banks rejecting loans to Black clients during the Great Depression. At the time, he declared that the department will launch the “most aggressive and coordinated effort” by the federal government to find and prosecute those who break laws that forbid such actions, working with other federal agencies.
Redlining, according to experts, has led to generational disparities since Black families have faced more barriers than White families to owning a property and being able to transfer that asset to their offspring.