City National Bank, a unit of Royal Bank of Canada, agreed to commit more than $31 million to boost lending to Black and Hispanic home buyers in the Los Angeles area, in the U.S. Department of Justice's largest settlement over illegal redlining, Reuters reported. Yesterday's settlement was part of Attorney General Merrick Garland's Combatting Redlining Initiative, launched in Oct. 2021 to combat housing discrimination. The Justice Department accused City National of violating the federal Fair Housing Act by having "avoided" serving majority-Black and majority-Hispanic neighborhoods in the Los Angeles area between 2017 and 2020. City National, the largest bank based in Los Angeles, was accused of letting staff generate loan applications largely from its disproportionately white customer base instead of reaching out to Black and Hispanic people, and ignoring internal reports that suggested shortcomings in its fair lending practices. The complaint said just 7% of City National's residential mortgage loans in the region went to residents of majority-Black and Hispanic census tracts, compared with 44% of loans by its peers, and that more loans in those tracts went to white people. Under a five-year consent order, City National will commit at least $29.5 million, with the goal of making mortgage and home improvement loans more widely available in majority-Black and Hispanic neighborhoods.
