F.N.B. Corp. in Pittsburgh agreed to pay $13.5 million to settle redlining claims in North Carolina.
The Department of Justice said in a press release that the amount resolves claims that the $45 billion-asset company used discriminatory lending practices in certain neighborhoods in Charlotte and Winston-Salem.
The allegations covered a period from 2017, when F.N.B. bought Yadkin Financial, to 2021, and included branch closures.
“We will not tolerate businesses that discriminate against our people, that is not who we are as a state,” N.C. Attorney General Josh Stein said on a media call. “North Carolinians’ right to be treated with equality and dignity is foundational to their ability to live happy lives and to be part of a productive state — and when those rights are infringed upon, we will take action.”
F.N.B. agreed to invest at least $11.7 million into a loan subsidy fund to increase credit for mortgages, refinances and home improvement loans in Charlotte and Winston-Salem.
F.N.B., which cooperated with the investigation, will retain independent consultants to enhance its fair lending program and better community needs for mortgage credit. It will conduct a community credit needs assessment, evaluate its fair lending compliance management systems and conduct staff training.
The bank will open two new branches in majority Black and Hispanic areas of Charlotte and one in Winston-Salem. F.N.B. also agreed to hire a director of community lending to oversee the “continued development of lending in communities of color.”
F.N.B. will spend $1 million on services tied to credit, consumer financial education, homeownership and foreclosure prevention for residents of predominantly Black and Hispanic neighborhoods. It will spend another $750,000 on advertising, outreach, consumer financial education and credit counseling.
Open three new branches in predominantly Black and Hispanic neighborhoods in Charlotte and Winston-Salem (two in Charlotte and one in Winston-Salem), with at least one mortgage banker assigned to each branch; and
F.N.B., which agreed to settle the matter without contested litigation, has already formed a special purpose credit program to provide more access to home loans in communities of color across its footprint.
F.N.B. said in a press release that it was “deeply disappointed” that the investigation began after the bank’s “brief presence” in the two North Carolina cities. The company noted that it had established a commitment to offering affordable credit in minority communities immediately following the Yadkin acquisition.
“We firmly assert [our] compliance with fair lending laws and strongly disagree with the DOJ’s allegations,” Jennifer Reel, the company’s chief communications officer, said in a separate press release.
“We cooperated fully to reach an agreement in this inherited matter as a good faith effort to avoid prolonged litigation and to maintain our focus on promoting equity and economic prosperity,” she added. “We are also proud to further advance our existing commitment to ensure minority and low- to moderate-income borrowers have access to credit and vital banking resources.”