Park National Bank (“Park National”), based in Ohio, has agreed to pay $9 million to settle allegations brought by the U.S. Department of Justice (DOJ) that it engaged in unlawful redlining practices in the Columbus metropolitan area by not providing mortgage lending services to majority-Black and Hispanic communities from 2015 to 2021.
According to the DOJ’s complaint filed with the U.S. District Court for the Southern District of Ohio, Park National concentrated all of its branches and mortgage lenders in majority-White neighborhoods and did not take any significant steps to make up for its absence in majority-Black and Hispanic communities. Further, the DOJ alleges that peer lenders generated mortgage applications at a rate between five and ten times higher than that of Park National in the majority-Black and Hispanic neighborhoods, and that peer lenders extended mortgage loans in such neighborhoods at a rate between 4.5 and 12.5 times higher than that of Park National.
Park National and the DOJ memorialized their agreement to settle all of the DOJ’s claims through a consent order filed with the federal court on February 28, 2023. Under the consent order, Park National agreed to invest at least $7.75 million in a loan subsidy fund to provide subsidies for home mortgage loans, home improvement loans, home refinance loans, and home equity loans for applicants in majority-Black and Hispanic communities in the Columbus area. Park National also pledged to allocate at least $750,000 towards advertising, outreach, consumer financial education, and credit counseling in the Columbus area. Further, Park National agreed to invest a minimum of $500,000 developing partnerships with community-based or governmental organizations to provide services related to credit, financial education, homeownership, and foreclosure prevention to residents of majority-Black and Hispanic census tracts in the Columbus Area. Additionally, Park National will open a new full service branch and a mortgage loan production office in majority-Black and Hispanic neighborhoods in the Columbus area, and assign at least four mortgage lenders, including a Spanish-speaking lender, to serve such neighborhoods.
The allegations made by the DOJ in the complaint, and the remedies provided for in the consent order, reflect the types of allegations and remedies in recent redlining settlements resulting from the DOJ’s Combating Redlining Initiative that was launched by Attorney General Merrick B. Garland in October 2021. The initiative is a nationwide effort to address lending discrimination against communities of color and, the settlement with Park National is part of the initiative. Since the initiative’s launch, the DOJ has announced six redlining cases and settlements, including settlements with Trustmark National Bank and Lakeland Bank, securing $84 million in relief for communities of color affected by lending discrimination across the United States.
In October 2021, in connection with announcing the initiative to combat redlining, the DOJ also announced the settlement with Trustmark National Bank regarding allegations of redlining in Memphis, Tennessee. Further, in October 2022, the DOJ settled with Lakeland Bank regarding allegations of redlining in Newark, New Jersey.