In a shocking turn of events, the Justice Department’s Combating Redlining Initiative has led to a major crackdown on Chevy Chase Federal Savings Bank, a financial institution accused of engaging in the illicit practice of redlining.
Redlining is an illegal practice in which lenders avoid providing services to individuals living in communities of color because of the race or national origin of the people who live in those communities.
According to the Justice Department, Chevy Chase Federal Savings Bank, which is located in Washington, D.C., has been found to be in violation of fair lending laws. The bank’s actions have resulted in a significant shortage of access to credit and financial services for communities of color in the area.
Assistant Attorney General Kristen Clarke and U.S. Attorney Matthew M. Graves for the District of Columbia conducted a walking tour along Washington D.C.’s historic U Street Corridor to commemorate the third anniversary of the Combating Redlining Initiative. They met with three of the longest enduring Black-owned businesses in Washington D.C. – Industrial Bank, Lee’s Flower and Card Shop and Ben’s Chili Bowl – to discuss how access to credit and financial services impacted the neighborhood.
The Justice Department’s Combating Redlining Initiative was launched in October 2021 by Attorney General Merrick B. Garland and Assistant Attorney General Clarke. Since its launch, the department has reached major milestones, including securing 13 settlements totaling $137 million in relief for communities of color across the country.
The settlements include $121 million in subsidies for home loans, which is expected to generate over $1 billion in investment in affected communities. The Justice Department’s fair lending enforcement work can be found at www.justice.gov/crt/fair-lending-program. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.
The Justice Department’s efforts to combat redlining are a major step forward in ensuring equal access to credit and financial services for all communities. The department’s work will continue to hold financial institutions accountable for unlawful redlining practices and provide relief to communities of color who have been disproportionately affected by these practices.
In related news, the Justice Department has announced that starting in 2025, lenders will be required to collect and report on the racial demographics of small business loans provided by financial institutions. This new requirement is aimed at increasing transparency and accountability in the lending process and ensuring that financial institutions are providing equal access to credit and financial services for all communities.
For more information on the Justice Department’s Combating Redlining Initiative, visit www.justice.gov/crt/fair-lending-program. To report lending discrimination, call 1-833-591-0291 or submit a report online.
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Key Facts
- State: District of Columbia
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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