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Justice Department Cracks Down on Cincinnati Banks Redlining Ohio Communities
The Justice Department has reached a settlement with Union Savings Bank and Guardian Savings Bank, two Ohio-based banks, to resolve allegations of redlining in Ohio and Indiana.
The settlement, which is subject to court approval, alleges that the banks engaged in a pattern or practice of ‘redlining’ predominantly African-American neighborhoods in and around Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis.
Redlining is the discriminatory practice of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives. The lawsuit alleges that from at least 2010 through 2014, Union and Guardian served the credit needs of the residents of predominantly white neighborhoods to a significantly greater extent than they served the credit needs of majority African-American neighborhoods.
As a result of the settlement, Union will open two full-service branches and Guardian will open one loan production office to serve the residents of African-American neighborhoods. Together, Union and Guardian will invest at least $9 million in majority African-American neighborhoods in the Cincinnati, Columbus, Dayton and Indianapolis metropolitan areas.
The investment includes $7 million in a loan subsidy fund to increase the amount of credit that Union and Guardian extend to residents of majority African-American census tracts. Additionally, the banks will invest $2 million in advertising, outreach, financial education and community partnership efforts.
The settlement also requires both banks to develop robust internal controls to ensure compliance with fair lending obligations and conduct fair lending training for their employees.
Key Facts
- State: Ohio
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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