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Assistant Attorney General Kristen Clarke Delivers Remarks Announcing $13.5 Million Agreement with First National Bank of Pennsylvania to Resolve Redlining Claims in North Carolina


Washington, DC
United States

Good morning. I am Kristen Clarke, Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice. I am joined today by U.S. Attorney Sandra Hairston for the Middle District of North Carolina and Attorney General Josh Stein of North Carolina.

Today I am pleased to announce that the Justice Department, along with the State of North Carolina, has secured a $13.5 million settlement with First National Bank of Pennsylvania. This agreement resolves allegations that the bank redlined Black and Hispanic neighborhoods in Charlotte and Winston-Salem, North Carolina — in violation of the Fair Housing Act and the Equal Credit Opportunity Act.

Redlining is one of the greatest threats to racial equality and economic opportunity today. Redlining occurs when lenders deny or discourage applications, or avoid providing loans in neighborhoods because of the race, color or national origin of the people who live in those neighborhoods.

First National Bank of Pennsylvania is one of the largest banks in the country. It has over $45 billion in assets and operates 350 branches throughout seven states and the District of Columbia. The bank operates 18 of those branches in Charlotte and 15 branches in Winston-Salem.

Our joint complaint alleges that First National Bank of Pennsylvania failed to provide mortgage lending services to majority-Black and Hispanic areas in Charlotte and Winston-Salem and discouraged potential loan applicants in those communities from seeking home loans. Our investigation found that the bank’s home mortgage lending business disproportionately focused on white neighborhoods in both cities.

We also allege that branches of First National Bank in both cities were overwhelmingly located in predominantly white neighborhoods. In Winston-Salem, the bank closed its only branch located in a majority-Black and Hispanic neighborhood, while opening two new branches in Charlotte — neither of which were in majority-Black and Hispanic neighborhoods — during the time period we looked at.

It is worth noting that peer lenders generated applications in majority-Black and Hispanic areas at two-and-a-half times the rate of First National Bank in Charlotte and four times the rate in Winston-Salem.

The bank relied on its mortgage loan officers, working almost exclusively out of predominantly white neighborhoods, to generate loan applications. In addition, the bank did not monitor its mortgage loan officers’ development of loan referrals or distribution strategies for mortgage marketing materials. And despite being aware of its weaknesses, the bank also failed to take meaningful steps to try to correct its poor lending performance in Charlotte and Winston-Salem.

As a result of our investigation, the bank has committed to investing $11.75 million in a loan subsidy fund that will help borrowers of color in Charlotte and Winston-Salem access credit, and they will open three new branches to service the credit needs of the Black and Hispanic communities in those cities. Our partner in this work, U.S. Attorney Hairston, will discuss the details of the agreement in further detail.

This settlement should send a strong message to banks, mortgage companies and financial institutions across the country that redlining will not be tolerated. We are prepared to hold institutions accountable when they engage in discriminatory conduct. Banks should be on notice that they will also be held accountable for redlining activity, even when conducted by entities that they have acquired or merged with. First National Bank entered North Carolina after merging with North Carolina-based Yadkin Bank — an entity that they assert lagged behind its peers in lending to majority-Black census tracts in the Charlotte and Winston-Salem MSAs. The federal government’s bank merger review process is alive and well.

There is great urgency underlying our work to combat redlining. Redlining is rooted in our nation’s sordid history of racial segregation and harms communities of color by limiting equal access to credit and shutting off opportunities to build wealth via homeownership. 

In North Carolina, 75% of white households own their homes, in comparison to just 47% of Black households.[1] This homeownership disparity matters — it perpetuates the racial wealth gap in our country. We know that for many Americans homeownership serves as the most vital component of net wealth.

That is why Attorney General Garland and I launched the Justice Department’s Combating Redlining Initiative. Through this initiative, the department has secured over $122 million in relief to affected communities in Los Angeles, Houston, Memphis, Philadelphia, Newark, Columbus, and the State of Rhode Island. Those matters also include our $31 million resolution with City National Bank, the largest redlining settlement in department history.

This Black History Month, we reaffirm our commitment to using every tool available to eradicate redlining and other racially discriminatory lending practices in communities of color nationwide.

I want to thank U.S. Attorney Hairston and her team, along with that of Attorney General Stein and his office, for their partnership on this matter. We are pleased with the action steps that First National Bank of Pennsylvania will now take to address the unlawful redlining that we have identified. In 2023, First National Bank established a Special Purpose Credit Program to increase access to home loans in communities of color in the seven states it operates in and the District of Columbia.

I’ll now turn the floor over to U.S. Attorney Hairston to provide more information about our resolution.

Thank you.

[1] U.S. Census Bureau. (2023). 2022: ACS 1-Year Estimates Subject Tables, Table S2502, North Carolina, retrieved from

Civil Rights
Fair Housing
Updated February 5, 2024