Old National Bank, based in Indiana, will direct more housing loan opportunities to the Black residents in order to settle a federal racial discrimination lawsuit filed back in October. The Fair Housing Center of Central Indiana (FHCCI) accused the bank of discriminating against Black people with their mortgage lending practices and violating the Fair Housing Act.
According to the Associated Press, Old National must lend out $27 million in loans to Black applicants and use another $3 million to create programs geared towards aiding Black people seeking mortgages.
In the FHCCI’s federal complaint, Old National Bank gave out 37 mortgage loans to Black applicants from 2019 to 2020 in the Indianapolis Metropolitan Statistical Area, according to IndyStar. An okay stand alone number until you realize the bank gave out 2,260 loans in total and nearly 28% of the Marion County population is Black.
Old National Bank denied allegations of discrimination.
Old National Bank plans to open a loan production office on the eastside of Indianapolis and in the International Marketplace on the westside, with the intention of transitioning both into full-service banking centers upon regulatory approval in two years, according to the press releases.
Nelson said that Old National Bank reached out to FHCCI after the federal complaint was filed to “see if we could work things out.”
Under the terms of the settlement, Old National Bank agreed to originate at least $20 million in single family purchase loans in majority-Black areas in Indianapolis over three years through the development of a Special Purpose Credit Program. The program is intended to help Black applicants and residents of majority-Black census tracts qualify for loans.
The bank also agreed to provide at least $7.5 million in loans to support affordable multifamily housing development in Indianapolis and $1.3 million in grants to local community development corporations and community organizations based in or serving majority-Black neighborhoods in the city.
In addition, the bank plans to hire an independent third-party consultant to conduct a “comprehensive redlining assessment” of their operations in key markets including Ft Wayne, Evansville, Louisville, Kentucky, and Minneapolis.
This settlement is more robust than other redlining settlements nationwide, Nelson said.
“The agreement announced today will counteract lending disparities for Black home seekers in Marion County by providing needed mortgage lending opportunities, bank branches, neighborhood stabilization grants, and fair lending education,” Amy Nelson, the executive director of the FHCCI, said in a press release Thursday, according to IndyStar. “The FHCCI and (Old National Bank) have created a guide for other financial institutions to address their own disparities and ensure fair lending opportunities for all.”