By Michael Finnegan for Los Angeles Times | January 12, 2023
City National Bank has agreed to pay $31 million to settle a U.S. Justice Department lawsuit alleging racial bias in its home mortgage lending in Los Angeles County.
The government’s complaint, filed Thursday in Los Angeles, accused the bank of violating federal housing and banking discrimination laws by avoiding loans to buyers of homes in neighborhoods that are majority Black or Latino.
City National Bank is the largest bank headquartered in L.A., but just one of the 11 branches it has opened in the county over the last 20 years is in a predominantly Black or Latino neighborhood. The county’s population of nearly 10 million is 49% Latino and 9% Black.
From 2017 to 2020, City National Bank maintained just three of its 37 branches in majority Black and Latino neighborhoods, the complaint said.
The bank relied on “relationship managers” to generate home loan applications from existing customers, who were predominantly white, the government alleged, and it failed to act on internal reports showing it risked running afoul of fair lending laws.
Other banks serving L.A. County received more than six times as many loan applications in Black and Latino areas, the government found.
City National Bank denied breaking discrimination laws, but said it agreed to settle the case to avoid prolonged litigation.
Under the proposed settlement, which was filed simultaneously with the complaint and requires court approval, the bank would provide $29.5 million in home loan subsidies to borrowers in Black and Latino areas, including interest-rate cuts and down-payment assistance.
Assistant Atty. Gen. Kristen Clarke and U.S. Atty. Martin Estrada announced the agreement at Second Baptist Church Los Angeles in Historic South Central, one of the city’s oldest Black churches. Nobody from the bank participated in the event.
Read the full article at LATimes.com.