On February 28, the U.S. Department of Justice (DOJ) announced its sixth redlining settlement under its Combatting Redlining Initiative. This most recent case involves an agreement between the DOJ and Ohio-based Park National Bank to resolve allegations that the bank failed to provide mortgage loans by redlining majority-Black and Hispanic neighborhoods in the Columbus, Ohio area. Under the terms of the proposed consent order, Park National will pay more than $9 million to resolve the allegations that it engaged in a “pattern or practice” of redlining in violation of the Fair Housing Act and the Equal Credit Opportunity Act.

In the complaint, which was filed in the federal district court for the Southern District of Ohio, the DOJ alleged that from 2015 through 2021, the bank avoided providing mortgage lending services to majority-Black and Hispanic neighborhoods in the Columbus metropolitan area. The complaint also alleged that all but one of the bank’s 101 mortgage lenders employed during the relevant time period were white. In addition, the DOJ alleged that the bank engaged in limited advertising of its mortgage loan products in the Columbus area, little of which was directed toward majority-Black and Hispanic audiences. Further, the bank allegedly failed to take steps to make its services available to persons with limited English proficiency (LEP) (which, we believe, is the first time an LEP-related allegation has been made as part of a redlining case). Of its residential mortgage loans in the relevant time period, only .92% were made to residents of majority-Black and Hispanic neighborhoods as compared to its peers’ 6.98% average.

The proposed consent order, if entered by the court, would require the bank to:

• Invest at least $7.75 million in a loan subsidy fund to increase credit for home mortgage loans and lines of credit for consumers applying in majority-Black and Hispanic census tracts in the Columbus area.
• Spend at least $750,000 in advertising, community outreach, and consumer financial education programs and credit counseling in the Columbus area.
• Spend at least $500,000 in developing partnerships with one or more community-based or governmental organizations that provide the residents of majority-Black and Hispanic census tracts in the Columbus area with services related to credit, financial education, homeownership, and foreclosure prevention.
• Establish one new mortgage loan production office and one new full-service branch in majority-Black and Hispanic census tracts in its Columbus area.
• Assign at least three additional mortgage lenders to solicit mortgage applications in majority-Black and Hispanic census tracts. At least one of the assigned mortgage lenders must be Spanish-speaking.

Our take on this case is twofold. First, it underlines (again) the seriousness of the DOJ’s commitment to bringing redlining cases. Second, the inclusion of allegations related to failing to serve LEP consumers, and the fact that part of the remediation involves having at least one Spanish-speaking loan officer, represents a variation on redlining that we have not seen before, and adds an element of self-evaluation that mortgage lenders may wish to engage in to assess their exposure to redlining claims.