FNB Settles Redlining Charges, Agrees to Invest in Minority Neighborhoods

Emma GrantManoj Prasad

First National Bank of Pennsylvania (FNB) will pay $13.5 million to settle federal redlining charges, the Department of Justice announced Monday. Redlining occurs when banks discriminate against minority neighborhoods by denying loans and discouraging applications.

The settlement addresses claims that FNB and its 2017 acquisition Yadkin Bank violated fair lending laws from 2017 to 2021. Specifically, the banks are accused of avoiding mortgage loans and services in majority-Black and Hispanic neighborhoods in Charlotte and Winston-Salem, North Carolina.

β€œRedlining will not be tolerated,” said Kristen Clarke, head of the DOJ’s civil rights division. She said the substantial settlement should deter other banks from similar practices.

As part of the deal, FNB will establish a $11.75 million loan subsidy fund for residents of formerly redlined areas. Another $1 million will go toward community partnership investments in those neighborhoods. The bank will spend $750,000 more on advertising, credit counseling, education and outreach targeted at affected communities.

FNB will also open at least two new branches in majority-Black and Hispanic neighborhoods in Charlotte, as well as one in Winston-Salem. According to the DOJ, FNB previously had just one branch serving such areas in each city, despite their large minority populations. The Winston-Salem branch closed last year.

Clarke said the settlement demonstrates the Justice Department’s commitment to combating modern-day redlining and ensuring equal access to credit.

Along with the DOJ, the settlement was joined by the Consumer Financial Protection Bureau and the Offices of the North Carolina Attorney General and North Carolina Commissioner of Banks.

FNB operates more than 300 branches in Pennsylvania, Ohio and North Carolina. With $41 billion in assets, it is the largest subsidiary of F.N.B. Corporation (FNB). FNB shares were little changed following news of the settlement.

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