Former National Bank resolves redlining allegations against Black Indy residents
The Evansville-based Old National Bank settled redlining allegations against black Indianapolis residents, agreeing to grant more than $ 27 million in loans to qualified black applicants and contributing more than $ 3 million to create programs to help black housing seekers obtain mortgages and invest in predominantly black neighborhoods.
Old National has also agreed to assess the potential for redlining in other cities over the next three months. The bank will hire a consultant or law firm to assess its lending practices to black and Hispanic applicants and in predominantly black and Hispanic census tracts in Evansville and Fort Wayne as well as Louisville, Kentucky and Minneapolis, Minnesota.
the settlement agreement between the Fair Housing Center of Central Indiana and Old National Bank was announced on Dec. 16 and will remain in effect for three years.
“The deal announced today will offset loan disparities for black housing applicants in Marion County by providing the necessary mortgage opportunities, bank branches, neighborhood stabilization grants and fair loan education.” , said Amy Nelson, Executive Director of FHCCI, in a press release.
“FHCCI and ONB have created a guide for other financial institutes to address their own disparities and ensure fair lending opportunities for all,” said Nelson.
In October, the Fair Housing Center filed a complaint in Southern Indiana District Court, saying Old National discriminated against blacks in its mortgage lending practices in Marion County. The lawsuit accused the bank of violating the Fair Housing Act by limiting black residents‘ access to mortgage credit and discouraging black residents from applying for mortgages.
Old National has denied any wrongdoing in the settlement agreement and, in a statement, highlighted the partnerships and grants it has made to community organizations in Marion County.
“We are deeply honored to serve our Indianapolis community and, over the past three years, we have provided over $ 1.7 million in grants and sponsorships to local community partners with a focus on strengthening underserved and low-income neighborhoods. Jim Ryan said in a press release. “Our partnership with FHCCI reinforces this commitment by focusing attention on the banking and borrowing needs of Marion County residents in majority minority and underserved neighborhoods.”
Under the settlement, Old National agreed to take steps to make mortgage loans more accessible to qualified black applicants and residents of predominantly black census trails in Marion County.
The bank will invest a minimum of $ 1.1 million in a loan subsidy program that will provide targeted borrowers with up to $ 10,000 to help cover down payments, mortgage insurance premiums and closing costs.
In addition, Old National will create at least $ 20 million in mortgages in predominantly black areas of Indianapolis through the development of the Special Purpose Credit Program which aims to help targeted applicants qualify for more affordable loans than terms generally available from Old National. .
In addition, the bank will expand its Home Manager Mortgage product which allows loans with a loan-to-value ratio of up to 97% without the requirement of private mortgage insurance. Program guidelines have been revised to increase eligibility.
In addition, Old National will provide $ 7.5 million in loans for the development of new multi-family housing in Indianapolis that will be affordable to individuals and families earning less than 60% of the region’s median income. In addition, the bank will provide $ 1.3 million in grants to support neighborhood stabilization and homebuyer education as well as home repair and rehabilitation.
Redlining assessments in other cities will include a review and possible recommended revisions of the bank’s fair lending policies and practices, as well as an analysis of Home Mortgage Disclosure Act data to identify loan applicants and applicants. origins by race and national origin. Once the assessment is complete, Old National will discuss the findings and future actions with FHCCI.
“FHCCI thanks Old National Bank for entering into this agreement,” said Nelson, “and we encourage other lenders in the area to ensure they are meeting the mortgage needs of the underserved and those who still live. with the historical disparities that have kept far too many Colored Hoosiers from the homeownership opportunity.