Ameris Bank will settle a federal lawsuit, paying $9 million after the federal government accused the lender of discriminating against Black-majority neighborhoods in Jacksonville.
U.S. Attorney General Merrick Garland announced the settlement Thursday in Jacksonville, two years after he launched the Justice Department’s Combating Redlining Initiative, an effort to go after discriminatory lending practices.
Garland said this settlement marks the 10th the U.S. government has secured in that time and $100 million that has been committed to communities harmed by banks and other lending institutions.
“Redlining is not just a relic of the past,” Garland said Thursday, referring to a century-old practice where the federal government identified Black-majority neighborhoods as riskier and less deserving of home loans. “Indeed, some of the neighborhoods that we allege Ameris redlined are some of the same neighborhoods that federal agencies originally redlined beginning in the 1930s.”
Ameris denied the allegations even though it agreed to settle the case, writing in the proposed consent order, “The Bank maintains that it was in compliance with applicable law at all times, but seeks to resolve this matter in order to avoid prolonged litigation.”
The consent order requires Ameris to invest $7.5 million in a loan-subsidy fund that residents of Black-majority and Hispanic-majority census tracts can use for down payments, to lower their interest rates or to make home improvements.
The bank must also spend $900,000 in outreach to residents of those neighborhoods, and to invest $600,000 to develop community partnerships to increase access to residential mortgages, financial education and foreclosure prevention.
At least three of the bank’s mortgage loan officers will be dedicated to serving Black- and Hispanic-majority neighborhoods, and the bank must hire a director of community lending to oversee its lending to those neighborhoods.
A court must approve the settlement.
The Justice Department notified Ameris of the investigation in January 2022.
The department found that at one point, Ameris sent 22,000 mailers announcing free checking services that the bank said was targeted to low- and moderate-income areas, but not one went to a resident living in a majority-Black or Hispanic neighborhood. The mailers featured exclusively white models.
According to Garland, other lenders produced loan applications to Black- and Hispanic-majority neighborhoods at triple the rate that Ameris did.
Ameris also closed a branch in 2019 that it called one of its best financial performers but that it had also said served larger minority populations than other branches. Today the closest branch to majority-Black neighborhoods in Jacksonville is its downtown location.
The settlement requires Ameris to open a full-service branch in a Black-majority neighborhood north of the St. Johns River. Ameris currently has 18 branches in the Jacksonville area.
Most of the $9 million will fund loan subsidy funds that residents of TKTK can use for down payments, to lower their interest rates or to make home improvements.
The consent order is the federal government’s 10th settlement since Garland announced the Justice Department’s Combating Redlining Initiative two years ago. Garland said the initiative has yielded more than $100 million for communities harmed by discriminatory lending.
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This story was originally published by The Tributary