NY’s Evans Bank Lawsuit Proves Redlining Is Alive & Still Discriminates Against Minorities
This story will make you check your calendar. Yep. it’s 2014. But banks are still redlining. Redlining is when a lender denies access to mortgages or charges higher interest rates in certain neighborhoods based solely on race. And according to New York’s attorney general a local bank didn’t lend to Blacks in Buffalo.
The mortgage lender is accused of refusing to offer financing to African Americans living in the city, reports MSN. Eric Schneiderman has filed a lawsuit in U.S. District Court charging Evans Bank of intentionally excluding predominantly African-American neighborhoods on Buffalo’s east side from its lending area. According to Schneiderman, the lawsuit is actually part of a wider investigation into the illegal practice of redlining.
Court papers claim that more than 75 percent of Buffalo’s African-American population was denied access to Evans Bank’s mortgage products. According to the lawsuit, the bank was accused of “bisecting the city” along racial lines. “Of the bank’s 14 branches in New York State, 11 are located in Buffalo’s mostly white suburbs. Because of this, just four of the 1,114 mortgage applications in the Buffalo area between 2009 and 2012 were from black residents, according to the lawsuit,” reports The Huffington Post.
This doesn’t seem to always have been the case. In 2009, Evans Bank began cutting off services and mortgages to areas that were predominately Black, according Schneiderman. In fact, as The New York Times reported, the bank went as far as to map out the city and then limited its mortgage products to a so-called “trade area.” The trade area excluded more than 85,000 Black residents, regardless of creditworthiness.
Of course, other banks have been accused of redlining in the past, such as Countrywide Financial in 2011, which wound up settling a lawsuit for $335 million. And in 2012, Wells Fargo settled similar accusations and agreed to pay out at least $175 million. Just last month, JPMorgan Chase had a lawsuit dismissed last month that accused the country’s largest bank by assets of both denying loans based on race and steering minority borrowers toward mortgages they could not afford, a predatory practice known as “reverse redlining.”
“Redlining is illegal, discriminatory, and must be made a thing of the past, once and for all,” Schneiderman said in a statement on Tuesday. “It is crucial that all New Yorkers, regardless of the color of their skin or the racial composition of their neighborhood, be afforded an equal opportunity to obtain credit.”
David J. Nasca, the president and chief executive of Evans bank, said in a statement sent to HuffPost that he was “disappointed” by the lawsuit.
“We continue to believe these allegations are without any merit and we intend to vigorously challenge them,” Nasca said. “We remain confident that our residential lending practices meet all applicable regulations.”