A Rhode Island-based bank has agreed to pay $9 million after being accused of discriminating against majority-Black and Hispanic neighborhoods in its lending practices, NBC News reports.
According to a complaint, Washington Trust Company, the oldest community bank in the nation, failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods in Rhode Island from 2016 to 2021.
Edward O. “Ned” Handy III, the bank’s CEO, said the company denies the allegation and entered the agreement to avoid the potential expense and distraction of litigation.
“We believe we have been fully compliant with the letter and spirit of fair lending laws, and the agreement will further strengthen our focus on an area that has always been important to us,” Handy said in a statement.
Investigators said the bank never opened a branch in a majority-Black and Hispanic neighborhood despite expanding across Rhode Island. Mortgage loan officers primarily worked in majority-white areas, according to investigators.
“Everyone who pursues the American dream has the right to expect to be treated equally and with dignity, regardless of their race, their background, or zip code,” Zachary Cunha, U.S. Attorney for the District of Rhode Island, said.
As part of the agreement, the bank will invest at least $7 million into a loan subsidy fund in an effort to “increase access to home mortgage, home improvement, home refinance and home equity loans and lines of credit for residents of majority-Black and Hispanic neighborhoods in the state,” NBC News reports.
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