Ameris Bank will pay $9 million in penalties following a Department of Justice ruling that the mortgage lender engaged in redlining in predominately Black and Hispanic neighborhoods in Jacksonville, Fla.
The ruling is part of the Justice Department’s Combating Redlining Initiative, which has netted more than $107 million in relief for communities of color nationwide that have experienced lending discrimination by banks or other mortgage lending businesses.
“As today’s case makes clear, redlining is not just a relic of the past,” says Attorney General Merrick B. Garland, in a statement. “That is why, two years ago this month, the Justice Department launched our Combating Redlining Initiative, and once today’s settlement is approved, that Initiative will have secured more than $100 million for communities across the country that have been harmed by discriminatory lending practices. This work is just the beginning – the Justice Department currently has over two dozen active investigations into redlining, spanning neighborhoods across the country.”
As part of the Combating Redlining Initiative, the department has partnered with U.S. Attorneys’ Offices, federal financial regulatory agencies, including the Consumer Financial Protection Bureau, and state Attorneys General offices to enforce federal fair lending laws that prohibit redlining, including the Fair Housing Act and the Equal Credit Opportunity Act.
The DOJ alleges that, from 2016 through 2021, Ameris Bank avoided providing mortgage services to majority-Black and Hispanic neighborhoods in Jacksonville and discouraged people seeking credit in those communities from obtaining home loans.
Ameris’ home mortgage lending was focused disproportionately on white areas of Jacksonville while other lenders generated applications in majority-Black and Hispanic neighborhoods at three times the rate of Ameris.
Although Ameris operates 18 branches in Jacksonville, Ameris has never operated a branch in a majority-Black and Hispanic neighborhood in the city.
The neighborhoods that the Department alleges Ameris redlined in Jacksonville are some of the same neighborhoods that were first redlined by Home Ownership Loan Corporation maps in the 1930s.
“Combating modern day redlining is one of the most important strategies for ensuring equal economic opportunity today,” says Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “By taking on the discriminatory lending practices of banks and mortgage companies, we are helping to ensure that more Black, Hispanic, and other communities of color are able to buy a home, generate wealth, and fulfill the American Dream. This settlement marks a new pinnacle in our efforts to bring an end to redlining and provides tangible relief to communities that have been starved of access to credit for far too long.”
“For far too long, redlining has negatively impacted communities of color across our country,” adds U.S. Attorney Roger B. Handberg for the Middle District of Florida. “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. 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.”
Under the proposed consent order, which is subject to court approval, Ameris Bank will invest $9 million to increase credit opportunities for communities of color in Jacksonville.
Specifically, Ameris will:
- Invest $7.5 million in a loan subsidy fund that will be made available to residents of majority-Black and Hispanic neighborhoods and those seeking credit in those communities.
- Invest $900,000 for advertising and outreach targeted toward the residents of these neighborhoods.
- Invest $600,000 to develop community partnerships to provide services that increase access to residential mortgage credit.
- Open a new branch in a majority-Black and Hispanic neighborhood in Jacksonville.
- Ensure that at least three mortgage loan officers are dedicated to serving majority-Black and Hispanic neighborhoods.
- Retain a consultant to assess the bank’s compliance management system as it pertains to redlining risk.
- Employ a full-time Director of Community Lending who will oversee the continued development of lending in majority-Black and Hispanic neighborhoods in Jacksonville.
In a statement, Palmer Proctor, CEO of Ameris, says his firm “strongly disagree[s] 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.
“We cooperated fully with the Department’s inquiry and have entered into this settlement to avoid the distraction of litigation and because we share the Department’s goal of expanding access to homeownership in underserved areas,” Proctor says. “The terms of this 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.
“With a 52-year history of service, Ameris is rooted in its purpose of bringing financial peace of mind to people and communities,” Proctor adds. “Over the years, this purpose has led us to introduce various mortgage loan and downpayment assistance programs, develop affordable loan opportunities, and deliver financial education to schools and community groups. We look forward to continuing these proactive efforts and helping more consumers achieve their financial goals.”
Photo: Eskay Lim