City National Bank, based in Los Angeles, was accused of refusing to underwrite mortgages in predominantly Black and Latino communities. The Justice Department alleged that this occurred between the years of 2017 and 2020. They used two major pieces of evidence: First, other banks operating in the same areas with predominantly people of color received six times as many mortgage applications during this time period. Second, of the 11 branches City National opened in the past 20 years, only one was in a neighborhood with predominantly people of color, and this branch did not have a designated underwriter. While it’s theoretically possible that City National Bank simply doesn’t have many customers that are people of color, discrimination is a likely reason for that.
While City National Bank denied the Justice Department’s allegations, they seemed cooperative with the investigation. They claimed that they supported efforts to ensure equal access and readily agreed to a settlement. The terms were a $29.5 million loan subsidy fund for Black and Latino borrowers as well as an outreach campaign costing $1.75 million. The 31.25 million dollar value makes this the largest settlement ever for the Justice Department.
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