An Indiana Bank has agreed to settle a federal lawsuit that was brought forward by a fair housing organization in October.
The settlement comes after a lawsuit was filed by the Fair Housing Center of Central Indiana in October. As part of the settlement, the Evansville-based Old National Bank has agreed to originate over $27 million in loans for Black applicants. The settlement also details that Old National Bank will give more than $3 million to programs that will help Black applicants. These programs seek to help Black applicants secure mortgages and will also be aimed at helping majority-black communities grow as they should.
The executive director of the fair housing center, Amy Nelson, explained that the settlement would provide more mortgage opportunities to Black applicants as more bank branches will be established in majority-black communities. Additionally, the settlement will bring about greater education about fair housing and fair lending practices. The settlement would also help with neighborhood stabilization grants so that majority-black communities have the ability to thrive the way their counterparts do.
The October lawsuit filed by the fair housing Center of Central Indiana accused Old National Bank of violating the Fair Housing Act for its practices that disadvantaged Black applicants who are seeking home mortgage loans.
The lawsuit explained that the bank deliberately discriminated against Black applicants by using practices that effectively amounted to redlining. Redlining is a term used to describe the discriminatory practice of keeping services, often financial, away from minority communities based on geographic mapping of neighborhoods.
While the Fair Housing Act outlawed the practice of redlining in 1986, it still persists through racially discriminatory lending practices including the ones Old National Bank is accused of. Today, the practice can commonly be observed in instances where Black-owned homes are appraised at values much lower than white-owned homes, as was the case with one Indianapolis Black woman, Carlette Duffy, according to NPR.
In their lawsuit, the FHCC accused Old National Bank of employing strategies including intentionally trying to limit its lending businesses to white customers and in areas that were predominantly white. By doing this, the bank effectively removed branches from Black communities and denied Black applicants a chance at securing a mortgage.
Old National Bank has consistently denied the claims of discrimination, and they did not admit guilt with this settlement. When the lawsuit was initiated, Old National Bank responded in a statement that it “strongly and categorically denies the claims made by the Fair Housing Center of Central Indiana regarding certain lending practices. Old National is committed to engaging in fair and equal lending practices.”
