City National Bank is one of the 50 largest Banks in the United States and was criticized for its redlining in and around the Los Angeles, California community. According to the Complaint that was filed in the Central District of California, US District Court, during the years 2017 through 2020, City National Bank avoided mortgage lending services in Black or Hispanic neighborhoods in the Los Angeles area. The Bank also discouraged residents in the Black or Hispanic neighborhoods from obtaining mortgages loans. It is alleged that during the same period, other Bank’s that serve the same area received approximately six times more mortgage applications than City National Bank from Black or Hispanic neighborhoods. During the period listed above, City National Bank opened or acquired 11 branches. Only one of these branches was in a majority Black or Hispanic neighborhood.
As part of the consent order City National Bank has agreed to additional concessions to help mitigate the potential of redlining. For additional information on the Department of Justice announcement please see the DOJ press release: https://www.justice.gov/opa/pr/justice-department-secures-over-31-million-city-national-bank-address-lending-discrimination
The DOJ’s website states that:
This Initiative (Combating Redlining Initiative), which will be led by the Civil Rights Division’s Housing and Civil Enforcement Section in partnership with U.S. Attorney’s Offices, will build on the longstanding work by the division that seeks to make mortgage credit and homeownership accessible to all Americans on the same terms, regardless of race or national origin and regardless of the neighborhood where they live. The Initiative will:
- Utilize U.S. Attorneys’ Offices as force multipliers to ensure that fair lending enforcement is informed by local expertise on housing markets and the credit needs of local communities of color.
- Expand the department’s analyses of potential redlining to both depository and non-depository institutions. Non-depository lenders are not traditional banks and do not provide typical banking services, but engage in mortgage lending and now make the majority of mortgages in this country.
- Strengthen our partnership with financial regulatory agencies to ensure the identification and referrals of fair lending violations to the Department of Justice.
- Increase coordination with State Attorneys General on potential fair lending violations.
More can be read about the DOJ’s redlining imitative here: Justice Department Announces New Initiative to Combat Redlining | OPA | Department of Justice