The largest bank headquartered in Los Angeles agreed to pay $31 million for allegedly engaging in lending discrimination in what is the largest redlining settlement in Department of Justice history, the department announced Thursday.
City National Bank, among the 50 largest banks in the U.S., engaged in redlining in Los Angeles County from 2017 through at least 2020, according to a Justice Department complaint filed in federal court Thursday.
The complaint alleges the bank “avoided providing mortgage lending services” to majority-Black and Hispanic neighborhoods and “discouraged residents in these neighborhoods from obtaining mortgage loans.”
Here’s what to know about redlining and the City National Bank case.
What is redlining?
“Redlining” is an illegal practice in which lenders avoid providing credit services to people living in communities of color, according to the Justice Department.
In the 20th century, banks and the real estate determined neighborhoods where people of color lived — outlined in red ink — were deemed the riskiest to invest in.
That meant it was largely impossible for people of color to get loans, thereby segregating communities, Glenn Harris, president of Race Forward and publisher of Colorlines, previously told USA TODAY.
The practice prevented Black families, in particular, from amassing and maintaining wealth in the same way that white families could, resulting in the growth of the racial wealth gap and housing insecurity which persists today.
