Citizens Republic Bancorp Inc. has agreed to open a mortgage loan office in a majority African-American neighborhood in Detroit and invest $3.6 million in surrounding Wayne County to settle allegations that the bank served predominantly white neighborhoods in Detroit "to a significantly greater extent," the Department of Justice said.
A complaint the Justice Department filed against Citizens and Citizens Bank of Flint said that as the successor to Republic Bank, the companies violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit mortgage lenders from discriminating on the basis of race and color.
"Citizens Bank, and Republic Bank before it, have served the credit needs of the residents of predominantly white neighborhoods in the Detroit metropolitan area to a significantly greater extent than they have served the credit needs of majority African-American neighborhoods," the Justice Department said in a press release.
"Those neighborhoods are easily recognized because the Detroit metropolitan area has long had highly segregated residential housing patterns, especially for African Americans."
Under the terms of the settlement, Citizens will invest $1.625 million in a partnership with the city of Detroit to aid in neighborhood stabilization by providing existing homeowners with matching grants of up to $5,000 to fund exterior improvements.
The settlement also funds $1.5 million for a special financing program to increase the amount of credit the banks extend to majority African-American areas in Wayne County. Citizens agreed to spend $500,000 for outreach to potential customers, promotion of their products and services, and consumer financial education.
Citizens Bank will open a loan production office in a majority African-American area in Detroit and conduct fair lending training for its employees.