Washington Trust to Pay $9 Million to Resolve DOJ's Redlining Claims
27 Setembro 2023 - 12:57PM
Dow Jones News
By Dean Seal
The Justice Department said Wednesday that Washington Trust, the
nation's oldest community bank, would pay $9 million to settle
allegations of lending discrimination against minority residents in
Rhode Island.
This is the department's latest action targeting "redlining,"
alleging that Washington Trust failed to provide mortgage lending
services to majority-Black and Hispanic neighborhoods in Rhode
Island for at least a five-year period that started in 2016.
Washington Trust said Wednesday that it denies the allegations
and reached an agreement with the Justice Department "solely to
avoid the expense and distraction of potential litigation."
In a civil complaint filed in Rhode Island federal court, the
Justice Department claims that Washington Trust failed to open a
branch in the state's minority neighborhoods and only had mortgage
loan officers working out of majority-white areas.
The bank never trained or incentivized its lending staff, or its
marketing team, to compensate for the lack of branches or presence
in majority-Black and Hispanic neighborhoods, all while other banks
received nearly four times as many loan applications from residents
of those neighborhoods, the DOJ said.
To resolve the claims, Washington Trust has agreed to invest at
least $7 million in a loan subsidy fund to expand access to
mortgages and other lines of credit for residents of minority
communities.
The bank also has agreed to spend $1 million on community
partnerships to provide services increasing mortgage credit access
for residents of those neighborhoods, and another $1 million on
advertising and outreach aimed at those residents.
Washington Trust has further agreed to open two branches in
those neighborhoods and assign at least two mortgage loan officers
to serve those neighborhoods.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
September 27, 2023 11:42 ET (15:42 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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