City National Bank in Los Angeles has agreed to commit more than $31 million to increase lending to Black and Hispanic homebuyers as part of a settlement with the Department of Justice.
The $90.7 billion-asset unit of Royal Bank of Canada was accused of violated the Fair Housing Act by redlining, the DoJ said in a press release.
City National, which denied wrongdoing, also accepted a five-year consent order that requires it to establish a fair lending committee and improve its training, community outreach and financial education, among other things.
The settlement includes a $29.5 million loan subsidy fund, $500,000 for advertising and outreach, $500,000 for a consumer financial education program, and $750,000 for developing community partnerships.
The DoJ’s complaint said that only 7% of the roughly 6,000 mortgages the bank made in the Los Angeles area between 2017 and 2020 were made in predominantly Black and Hispanic census tracts.
City National maintained in the consent order that “it was in compliance with applicable law at all times, but seeks to resolve this matter in order to avoid prolonged litigation.”
The consent order is subject to court approval.