Newark, Ohio-based Park National Bank (PNB) will pay $9 million to settle allegations of using redlining practices in the Columbus metro area spanning from 2015 to 2021, the Department of Justice announced Tuesday.
During this time period, Park National concentrated most of its lending branches in majority-white neighborhoods, in effect redlining minority neighborhoods. The bank also did not make any attempts to “compensate for its lack of physical presence” in these communities, the federal regulator said.
Additionally, PNB “engaged in conduct” that would discourage mortgage applications from prospective applicants who are residents of or seeking credit in majority-Black and Hispanic census tracts within Columbus, the DOJ’s consent order said.
PNB, a $9.8 billion asset multi-state bank with a total of 92 full-service branches, did not “admit or deny any of the allegations” and has opted to settle the matter without contested litigation.
Under the consent order, which is subject to court approval, Park National has agreed to dish out $7.75 million in a loan subsidy fund to increase credit access in minority neighborhoods, $750,000 for advertising and outreach and $500,000 for developing community partnerships.
The bank must also open one new branch and one new mortgage loan production office in majority Black-and Hispanic neighborhoods in the Columbus area and maintain a full-time position of an executive who will be responsible for overseeing lending in minority areas.
The settlement with PNB is part of an interagency initiative between the DOJ, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency to combat redlining. The initiative was launched in October 2021 by Attorney General Merrick B. Garland.
Since then, the DOJ has announced six redlining cases and settlements totaling over $84 million in relief for communities of color, the department said. This includes a $31 million settlement with City National Bank in January, the largest in the department’s history.
Kristen Clarke, assistant attorney general for the DOJ, vowed that the federal regulator will “continue to fight to fulfill our promise of our nation’s fair lending laws while tearing down the discriminatory barriers that deny Black people and other people of color access to economic opportunity.”
“When banks fail to provide equal access to lending services in neighborhoods of color, they engage in modern day redlining and exacerbate the racial wealth gap in our country,” Clarke added in a written statement.