WASHINGTON, Sept 29 (Reuters) - U.S. authorities reached a settlement with Eagle Bank and Trust Company over allegations that the St. Louis-area bank discriminated against black neighborhoods by not opening branches in those neighborhoods, a practice known as “redlining.”
Officials at the U.S. Department of Justice and Consumer Financial Protection Bureau have been ramping up investigations against banks suspected of discriminatory lending practices.
The case against Eagle Bank is the third discriminatory lending case to be resolved by prosecutors over the past two weeks. The U.S. Justice Department recently settled allegations against Fifth Third Bank and Hudson City Savings Bank. None of the companies admitted to wrongdoing.
“Banks continue to build and structure their lending operations in a way that avoids or fails to meaningfully serve communities of color, based on assumptions about the financial risk,” said Vanita Gupta, principal deputy assistant attorney general at the Justice Department.
Over the past 17 years, Eagle Bank and Trust built 11 banks in the St. Louis area, but none were in majority black neighborhoods, Justice Department officials said. As part of the settlement, Eagle Bank agreed to open two new branches in majority African American neighborhoods in north St. Louis and invest $975,000 in banking services for the areas.
In an emailed statement, Eagle Bank’s CEO said, “While we disagree with the government’s allegations, we also know we must put the best interests of the people we serve above any desire to continue discussions in the hopes of reaching a different outcome.” (Reporting by Joel Schectman; Editing by David Gregorio)