The Department of Justice on Thursday announced a $31M settlement with City National Bank to resolve allegations that it engaged in lending discrimination in Los Angeles County.
The resolution, which is the largest redlining settlement, includes over $31M in relief to impacted individuals and communities. Redlining is an illegal practice in which lenders avoid providing services to individuals based on race or ethnicity.
A complaint filed in federal court alleged that from 2017 through at least 2020, City National avoided providing mortgage lending services to majority-Black and Hispanic neighborhoods in L.A. County. Also, other banks allegedly got over six times as many applications in majority-Black and Hispanic neighborhoods in L.A. County than City National each year.
As part of the settlement, City National will invest at least $29.5M in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods in L.A. County.
The settlement is part of the DOJ's Combating Redlining Initiative that Attorney General Merrick Garland launched in October 2021. "So far, the initiative secured over $75M in relief for communities that have suffered from lending discrimination," said Garland.
City National is a unit of Toronto-based Royal Bank of Canada ( NYSE: RY ).
Earlier, Bank of America upgraded the Canadian bank to Neutral .
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DOJ announces $31M redlining settlement with RBC's City National Bank