The U.S. Department of Justice (DOJ) recently entered into a consent order with a state-chartered bank in Rhode Island, resulting in a $9 million settlement. This settlement was reached due to allegations of ‘redlining’, an illegal practice in real estate where companies discriminate against potential clients based on their race or ethnicity, in this case, majority-Black and Hispanic neighborhoods.
The complaint, filed in the U.S. District Court for Rhode Island, indicates that this misconduct spanned from 2016 to at least 2021. The Rhode Island bank is said to have failed to provide adequate mortgage lending services to these communities during this period.
Redlining constitutes a severe breach of the Fair Housing Act of 1968, which prohibits any discrimination regarding the sale, rental, or financing of housing based on race, color, national origin, religion, sex, familial status, or disability. This recent settlement serves as a stark reminder of the importance of compliance with this legislation and the subsequent penalties for failure to do so – a lesson all financial institutions must heed.
For more details, consult the full legal report from
Weiner Brodsky Kider PC on JD Supra.