Bank Ameris will compensate $9 million to conclude a government investigation regarding redlining practices
In a significant move, Ameris Bank has agreed to pay $9 million to settle allegations of avoiding providing mortgage services to majority-Black and Hispanic neighborhoods in Jacksonville, Florida, between 2016 and 2021. This settlement, announced by the Department of Justice (DOJ), marks a new milestone in the DOJ's ongoing efforts to combat redlining.
U.S. Attorney General Merrick Garland stated that this form of discrimination in lending violates federal law and is contrary to the promise of equal access to opportunity upon which both the economy and democracy depend. He emphasised that redlining is not just a relic of the past, and that some of the Jacksonville neighborhoods the DOJ claims Ameris avoided were redlined in the 1930s by the Home Ownership Loan Corp.
As part of the settlement, Ameris has pledged to open a new branch in a majority-Black and Hispanic neighbourhood in Jacksonville and dedicate at least three mortgage loan officers toward serving those communities. The bank will also invest $7.5 million over a five-year span in a loan subsidy fund for residents of these neighbourhoods.
Ameris CEO Palmer Proctor stated that the company cooperated fully with the Department's inquiry and entered into the settlement to avoid litigation and because it shares the Department's goal of expanding access to homeownership in underserved areas. The bank will also hire a consultant to assess its compliance management system in regard to redlining risk.
In addition, Ameris Bank will put $900,000 toward advertising and outreach targeting those neighbourhoods' residents, and will use $600,000 to develop community partnerships aimed at boosting access to residential mortgage credit in these neighbourhoods. The bank has also agreed to appoint a full-time director of community lending to oversee efforts to serve borrowers in these neighbourhoods.
It is worth noting that the Ameris settlement is the 10th of its kind the DOJ has announced, yielding a total of $107 million in relief as part of its coordinated effort to fight lending discrimination, launched in 2020. The DOJ is engaged in a further two dozen active investigations into redlining allegations across the U.S.
Ameris strongly disagrees with any suggestion that it has engaged in discriminatory conduct and is confident in its efforts to provide equal access to affordable mortgage products. However, the bank acknowledges the need for improvement and is committed to addressing the issues raised by the DOJ.
This settlement marks a significant step forward in the fight against redlining and the promotion of equal access to homeownership opportunities. It serves as a reminder that the promise of equal opportunity must be upheld in all aspects of society, including the financial sector.
