On Thursday (January 12), the Justice Department accused City National of avoiding marketing and underwriting mortgages in majority Black and Latino neighborhoods in Los Angeles County between 2017 and 2020. During that time period, other banks received six times more mortgage applications in those neighborhoods than City National, DOJ officials said.
City National, which has roughly $95 billion in assets, has been so insistent on avoiding operations in Black and Latino communities that the bank has only opened one branch in those neighborhoods for the past 20 years. During those two decades, the bank opened or acquired 11 branches.
The settlement announced on Thursday marks the largest redlining case in DOJ history.
“This settlement should send a strong message to the financial industry that we expect lenders to serve all members of the community and that they will be held accountable when they fail to do so,” Assistant Attorney General Kristen Clarke, who leads the Justice Department’s civil rights division, said in a statement.
City National is the latest in a string of banks that have been found guilty of systematically avoiding lending to people of color. Though laws have been put in place to combat redlining, the discriminatory practice still persists and its long-term effects felt.
As part of the $31 million settlement, City National Bank will start a $29.5 million loan subsidy fund for loans to Black and Latino borrowers. The bank is also set to funnel $1.75 million into advertising, community outreach, and financial education programs to reach borrowers of color.
City National Bank said in a statement that it disagreed with the allegations, but “nonetheless support the DOJ in its efforts to ensure equal access to credit for all consumers, regardless of race.”
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