For Immediate Release:
Monday, February 5, 2024
Contact:
Nazneen Ahmed (919) 716-0060
(RALEIGH) Attorney General Josh Stein today reached a settlement with First National Bank of Pennsylvania (FNB) over allegations that the bank engaged in racially discriminatory redlining when providing home mortgage loans in the Charlotte and Winston-Salem areas. The North Carolina Department of Justice reached the settlement in coordination with the U.S. Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Middle District of North Carolina.
“When banks discriminate, it means hardworking people can’t buy a house, start a business, or invest in their futures,” said Attorney General Josh Stein. “I want every person who calls North Carolina home to have a fair shot, and I’m pleased that this settlement will create better borrowing opportunities for all North Carolinians.”
FNB entered the North Carolina market in 2017 when it acquired Yadkin Bank. It currently operates 16 branches in the Charlotte area and 15 branches in the Winston-Salem area. Attorney General Stein alleged that between 2017 and 2021, FNB avoided providing mortgage loans in areas of Charlotte and Winston-Salem that had majority Black and Hispanic residents. FNB did, however, work hard to provide mortgage loans to the parts of those areas that had a majority of white residents. The attorney general alleged that FNB’s conduct discouraged Black and Hispanic North Carolinians from applying for loans.
As a result of this settlement, FNB will create a $11.75 million loan subsidy fund that will help increase credit for home mortgage loans for communities of color in the Charlotte and Winston-Salem areas. The funds will be used to originate loans, assist in down payment and closing costs, and help pay people’s mortgage insurance premiums. The bank will also open two new branches in Charlotte and one new branch in Winston-Salem to provide financial services to residents of color. FNB will also employ staff focused on lending to communities of color in Charlotte and Winston-Salem, spend $750,000 on advertising its services to communities of color in the two areas and providing consumer financial education, and review its fair lending and community credit needs to ensure it is helping the communities. As part of its settlement with USDOJ, FNB will also spend $1 million on community partnerships to provide credit and financial services in these areas.
The North Carolina Department of Justice’s Consumer Protection Division, working in collaboration with the department’s Civil Rights Unit, investigated the concerns. The Consumer Protection Division investigates allegations of scams, fraud, and unlawful business practices. You can file a complaint with the Consumer Protection Division here. The Civil Rights Unit investigates alleged violations of civil rights laws and discriminatory practices and provides education and referrals on civil rights issues. You can file a complaint with the Civil Rights Unit here.
A copy of the consent order is available here.
###