Dive Brief:

• Ameris Bank has agreed to pay $9 million to settle a probe into allegations the Atlanta-based lender avoided providing mortgage services to majority-Black and Hispanic neighborhoods in Jacksonville, Florida, between 2016 and 2021, the Justice Department said Thursday.
• During that time, other lenders generated mortgage applications in majority-Black and Hispanic neighborhoods at three times the rate that Ameris did, the DOJ said.
• As part of the settlement, Ameris pledged to open a new branch in a majority-Black and Hispanic neighborhood in Jacksonville and dedicate at least three mortgage loan officers toward serving those communities in the city. Ameris counts 18 branches in the city, but none are located in a majority-Black or Hispanic neighborhood, the DOJ said.

Dive Insight:

Thursday’s agreement comes nearly two years to the day after the DOJ launched a coordinated effort to fight lending discrimination alongside the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. With the Ameris settlement — the 10th of its kind the DOJ has announced in that time — the initiative will have yielded $107 million in relief.

“Redlining is not just a relic of the past,” U.S. Attorney General Merrick Garland said in a statement Thursday, adding that some of the Jacksonville neighborhoods the DOJ claims Ameris avoided were redlined in the 1930s by the Home Ownership Loan Corp. 

In particular, Garland noted that Ameris in 2019 closed a branch in Jacksonville’s “urban core” — the bank’s location nearest to most of the city’s majority-Black or Hispanic neighborhoods — as part of an “efficiency initiative,” even though Ameris had labeled that branch among its “best financial performers.”

Ameris, in a statement Thursday, said it “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,” Ameris CEO Palmer Proctor said.

In its settlement, Ameris agreed to invest $7.5 million, over a five-year span, in a loan subsidy fund for residents of Jacksonville’s majority-Black and Hispanic neighborhoods. The bank will also put $900,000 toward advertising and outreach targeting those neighborhoods’ residents. And Ameris will use $600,000 to develop community partnerships aimed at boosting access to residential mortgage credit.

Additionally, the bank agreed to dedicate a full-time director of community lending to oversee efforts to serve borrowers in Jacksonville’s majority-Black and Hispanic neighborhoods. Ameris will also hire a consultant to assess the bank’s compliance management system in regard to redlining risk.

Kristen Clarke, assistant attorney general in the DOJ’s civil rights division, said Thursday’s 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.” 

Presumably, Clarke is referencing the idea that the Ameris agreement pushes the DOJ’s relief total from its anti-redlining effort past $100 million.

Garland, for one, noted that the DOJ is engaged in a further two dozen active investigations into redlining allegations across the U.S.

“This kind of discrimination in lending violates federal law. And it is contrary to the promise of equal access to opportunity upon which both our economy and our democracy depend,” he said Thursday.