Newark's Park National Bank reaches $9 million racial discrimination settlement in Columbus
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The U.S. Justice Department on Tuesday announced a complaint against Park National Bank for alleged racial discrimination in its lending practices in Columbus.
The department simultaneously announced that it negotiated a settlement with the Newark-based bank, according to which the bank will pay $9 million in fines but neither admits nor denies the allegations.
Park National Bank allegedly violated the Fair Housing Act and the Equal Credit Opportunity Act between 2015 and 2021 by failing to open branches in majority Black and Hispanic neighborhoods in the Columbus Metropolitan Area, issuing disproportionately low numbers of loans to people from those neighborhoods, and failing to ensure fair lending oversight, policies, and procedures.
The bank's chairman and CEO David Trautman said that the bank is cooperating completely with the Department of Justice.
“While we disagree with any suggestion that intentional discrimination took place, we are united with the DOJ in our commitment to ensuring equal access to credit for all consumers," he said in a statement.
U.S. Attorney Kenneth Parker announced the complaint and settlement from the Martin Luther King, Jr. Branch of the Columbus Metropolitan Library. He noted that the case is part of an effort to combat modern-day redlining, or racially discriminatory mortgage lending practices that were outlawed by civil rights legislation in the 1960s and 70s.
“Dr. Martin Luther King called homeownership a door to opportunity, which for most Americans, is their single most valuable asset…the United States Attorney's Office works to maintain fair housing opportunities for our communities of color,” he said.
Park National Bank has 92 full-service branches in Ohio, Kentucky, North Carolina, and South Carolina, including 20 in Greater Columbus. It has $9.8 billion in assets, according to the civil complaint.
As part of the $9 million fine, the bank agreed to invest at least $7.75 million in a loan subsidy fund for use in communities of color, and to invest $750,000 in outreach, advertising, consumer education and credit counseling initiatives in those communities.
Racial discrimination shaped the development of many Columbus neighborhoods, with informal racial covenants as well as government-approved redlining by banks limiting where non-white families could live or buy a house.
As the costs of housing rise, access to credit has become increasingly important. The median home sales price in central Ohio rose 11.5% in 2022, the third year in a row that it rose by double digits.
More:Redlining practices decades ago still influence life in Columbus neighborhoods
Assistant Attorney General for the Civil Rights Division Kristen Clarke, who traveled to Columbus for the announcement Tuesday, said the Justice Department began investigating Park National roughly two years ago.
She said the investigation falls under Attorney General Merrick Garland’s Combating Redlining Initiative, announced in 2021, which has resolved six redlining cases across the country so far.
“Redlining not only harms Black people and people of color who are denied equal access to credit and the opportunity to build wealth, it also spans generations as communities have been deprived of investment,” said Clarke.
“Let today's settlement send a clear message to banks and financial institutions in the Southern District of Ohio: that we will not tolerate discriminatory lending practices,” Parker said.
Peter Gill covers immigration and new American communities for The Dispatch in partnership with Report for America. You can support work like his with a tax-deductible donation to Report for America here:bit.ly/3fNsGaZ.
pgill@dispatch.com
This article originally appeared on The Columbus Dispatch: Park National pays $9M settlement for Columbus discrimination case
