City National Bank agrees to pay $31 million to resolve redlining complaints

Jan. 12 (UPI) -- City National Bank has agreed to pay $31 million to resolve allegations that it engaged in redlining, an illegal practice where financial institutions refuse to provide credit services or mortgages to people from communities of color, the U.S. Department of Justice announced Thursday.

"The complaint filed in federal court today alleges that from 2017 through at least 2020, City National avoided providing mortgage lending services to majority-Black and Hispanic neighborhoods in Los Angeles County and discouraged residents in these neighborhoods from obtaining mortgage loans," reads a press release from the Department of Justice Thursday.

If the court approves a consent order, which was also filed on Thursday, City National Bank will have to invest at least $29.5 million into a loan subsidy fun for majority-Black and Hispanic neighborhoods of Los Angeles County, open one new branch in a majority-Black and Hispanic neighborhood in Los Angeles County, and invest in outreach to communities affected by redlining.

The Department of Justice credits the Combating Redlining Initiative, launched in October 2021 by Attorney General Merrick Garland, for the agreement.

"Fifteen months after I vowed that the Justice Department would be aggressively stepping up our efforts to combat discriminatory practices in the housing market, we have today secured the largest redlining settlement in Department history," Garland said.

If approved by the court, the settlement will be the largest ever paid in connection to the initiative.