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A Florida bank accused of redlining in parts of Jacksonville historically subject to discriminatory lending practices has agreed to a $9 million settlement with the U.S. Department of Justice, which says it has over two dozen active investigations into redlining underway around the country.

Although Ameris Bank operates 18 branches in Jacksonville, it has never operated a branch in a majority-Black and Hispanic neighborhood in the city and avoided providing home loans to residents of those neighborhoods, the government alleged in announcing the settlement Thursday.

In a consent order filed in federal court Thursday, Ameris Bank denied the allegations, maintaining that “it was in compliance with applicable law at all times, but seeks to resolve this matter in order to avoid prolonged litigation.”

“We strongly disagree with any suggestion that we have engaged in discriminatory conduct and are confident in our efforts to provide equal access to affordable mortgage products in the Jacksonville community and all the markets we serve,” Ameris CEO Palmer Proctor said in a statement.

In its complaint, the Department of Justice said that from 2016 through 2021, only 2.7 percent of the 4,178 Ameris home loans analyzed were made to residents of majority-Black and Hispanic census tracts. Ameris’ competitors did 9.5 percent of their business in those census tracts — about 3.5 times the rate of Ameris.

Under the proposed consent order, Ameris agreed to:

  • Invest $7.5 million in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods and those seeking credit in those communities.
  • Spend $900,000 for advertising and outreach in those neighborhoods.
  • Invest $600,000 to develop community partnerships to increase access to mortgage credit.
  • Open a new branch in a majority-Black and Hispanic neighborhood in Jacksonville.
  • Employ at least three mortgage loan officers dedicated to serving majority-Black and Hispanic neighborhoods.
  • Employ a full-time director of community lending for majority-Black and Hispanic neighborhoods in Jacksonville.
  • Retain a consultant to assess the bank’s compliance management system as it pertains to redlining risk.

“Ameris is working cooperatively with the Department to address the credit needs of residents in majority-Black and Hispanic neighborhoods in Jacksonville,” the Department of Justice said in announcing the settlement. “Beyond the agreement, Ameris has committed to expanding its lending services across its markets to underserved communities.”

Procter said the terms of the settlement are “consistent with the bank’s existing programs and initiatives. We condemn discrimination in any form and remain committed to helping people in underserved communities gain equal opportunity to achieve homeownership, as well as access to banking services.”

Since announcing the Combating Redlining Initiative in October 2021, the Department of Justice has reached settlements totaling more than $107 million with 10 lenders, including:

  • The Washington Trust Company, which agreed in September to invest and spend at least $9 million to improve access to mortgage credit in minority neighborhoods in Rhode Island.
  • Newark, Ohio-based Park National Bank in February agreed in February to invest at least $7.75 million in a loan subsidy fund to increase access to credit in majority-Black and Hispanic neighborhoods in the Columbus area.
  • In what was touted as the biggest redlining settlement ever reached by the Department of Justice, City National Bank in January agreed to invest at least $31 million in majority-Black and Hispanic neighborhoods in Los Angeles County.
  • Lakeland Bank in September 2022 agreed to invest at least $12 million in a loan subsidy fund for residents of Black and Hispanic neighborhoods in the Newark, New Jersey metropolitan area, including neighborhoods in Essex, Somerset and Union counties.
  • Berkshire Hathaway-owned Trident Mortgage Company in July 2022 agreed to invest more than $20 million to create home ownership opportunities in communities of color around Philadelphia.

Attorney General Merrick Garland said the Justice Department “currently has over two dozen active investigations into redlining, spanning neighborhoods across the country.”

Historic redlining in Jacksonville, Florida

This map of Jacksonville, Florida, employing racially biased assessments to grade perceived lender risk was created in 1937 by the Home Owners’ Loan Corporation. Credit: Mapping Inequality project

In announcing the settlement with Ameris, the Justice Department noted that some of the neighborhoods Ameris allegedly failed to serve were also subjected to redlining nearly 100 years ago, using maps produced by the Home Owners’ Loan Corporation (HOLC) in the 1930s.

Academics who have studied the maps say they used racially biased assessments to grade perceived lender risk in more than 200 cities. Many of the maps have been preserved by the Mapping Inequality project, a collaboration between four universities.

In its complaint, the Department of Justice said all 48 majority-Black and Hispanic census tracts within Ameris’ Jacksonville assessment area are located in Duval County, and most are located in and around downtown Jacksonville.

The Department of Justice alleged that Ameris knew as long ago as 2016 that its internal procedures weren’t able to identify and measure redlining risk, but that the bank did not revise its monitoring practices until 2018. After revising its monitoring, Ameris identified low- and moderate-income or high-minority tracts where other lenders originated loans in 2017, but Ameris did not.

In the summer of 2018, the bank’s compliance department recommended that Ameris mortgage bankers “build partnerships with local Realtors and community partners to improve lending in high-minority communities,” and conduct mortgage banker training, the Justice Department alleged.

While Ameris created a new Community Reinvestment Act (CRA) mortgage banker position, the job was given “to a person who did not apply for or seek out the role, had no banking experience or relevant background knowledge, and no familiarity with or connections to Black or Hispanic neighborhoods in Jacksonville,” the government alleged. “During his approximately one year and seven months in the role, the CRA mortgage banker did not originate a single loan.”

As part of a January 2019 “efficiency initiative,” Ameris closed two branches in census tracts that it had identified as having a greater concentration of minority populations than adjacent branches, the Justice Department alleged.

“Ameris did not close any branches in white areas of its Jacksonville assessment area as part of the efficiency initiative,” the complaint alleged, and “the remaining sixteen Ameris branches were not readily accessible to the population living in majority-Black and Hispanic tracts.”

The Justice Department also pointed to Ameris’ alleged failure to market to minority communities as evidence that the bank engaged in a “pattern or practice” of redlining predominately Black and Hispanic neighborhoods.

In 2020, for example, Ameris sent a “free checking mailer” featuring images of white models to 13 zip codes. Of the 22,759 postcards that went out, 96.5 percent were sent to majority-white census tracts, and “Not one postcard was sent to a single resident living in a majority-Black and Hispanic tract,” the Justice Department alleged.

“Today’s agreement with Ameris Bank represents the first redlining case brought by the Department of Justice in the state of Florida and signals a step forward for Black and Hispanic communities in Jacksonville that were previously denied access to economic resources for generations,” Roger Handberg, the U.S. Attorney for the Middle District of Florida, said in a statement. “This settlement means that Ameris Bank will provide financial remedies to Jacksonville’s underserved communities, and it demonstrates our commitment to guaranteeing equal access to housing and credit resources for all Americans.”

Editor’s note: This story has been updated with comments from Ameris CEO Palmer Proctor.

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Email Matt Carter

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