Essa Bancorp in Stroudsburg, Pa., will pay about $3 million to resolve redlining claims.
The Justice Department said in a press release that the $2 billion-asset company’s bank agreed to a consent order addressing allegations it engaged in lending discrimination towards majority Black and Hispanic neighborhoods.
The claims covered a period from 2017 to 2021.
“This resolution makes clear our commitment to holding banks and financial institutions accountable for modern-day redlining while ensuring access to fair lending in communities of color,” Kristen Clarke, the assistant attorney general of the DoJ’s civil rights division, said in the release.
Essa agreed to invest at least $2.9 million in a loan subsidy fund for majority Black and Hispanic neighborhoods to boost access to credit for mortgages, improvement and refinance loans, home equity loans and credit lines.
The bank also pledged $125,000 for community partnerships and $250,000 to advertising, outreach, consumer financial education and credit counseling. The order also requires Essa to hire two mortgage loan officers and conduct a research-based market study to identify financial services needs in communities of color.
The investigation followed a referral from the Federal Deposit Insurance Corp. Essa fully cooperated with the probe and “worked expeditiously to resolve” the claims, the release said.