United States v. First National Bank of Pennsylvania (M.D. N.C.)
On February 13, 2024, the court entered a consent order in United States v. First National Bank of Pennsylvania, et al. (M.D.N.C.). The complaint, which was filed on February 5, 2024, by the United States and North Carolina Department of Justice, alleges that First National Bank of Pennsylvania (including as successor in interest to Yadkin Bank, which it acquired in 2017) violated the Equal Credit Opportunity Act and the Fair Housing Act by engaging in unlawful redlining in its service areas in the Charlotte and Winston-Salem, North Carolina markets. Specifically, among other things, the complaint alleges the bank located and maintained nearly all of its branches and mortgage loan officers outside of majority-Black and Hispanic neighborhoods, relied on mortgage loan officers concentrated in majority-white areas as the primary source of new loan applications, and maintained inadequate internal fair lending policies and procedures to ensure that the bank was positioned to provide equal access to majority-Black and Hispanic neighborhoods. As a result, the bank’s peers generated lending activity in those neighborhoods at two to four times the rate of other banks with similar lending volume. The consent order requires the defendant to invest at least $11.75 million in a loan subsidy fund to increase credit opportunities for residents of majority-Black and Hispanic neighborhoods in Charlotte and Winston-Salem; spend $1 million on community partnerships to provide services to residents of those neighborhoods; spend $750,000 for advertising, outreach, consumer financial education and credit counseling focused on those neighborhoods; open two new branches in majority-Black and Hispanic neighborhoods in Charlotte and one such branch in Winston-Salem; ensure that at least two mortgage bankers and two community homeownership specialists are assigned to solicit loan applications from majority-Black and Hispanic neighborhoods in Charlotte and Winston-Salem; and employ a Director of Community Lending who will oversee the continued development of lending in communities of color in North Carolina. First National Bank of Pennsylvania also agreed to complete a community credit needs assessment, to assess and report on its fair lending program; and to train staff on the bank’s obligations under the consent order.