Justice Department Secures Over $3 Million Redlining Settlement Involving ESSA Bank & Trust in Philadelphia

<p>FOR IMMEDIATE RELEASE<br &sol;>&NewLine; Wednesday&comma; May 31&comma; 2023<br &sol;>&NewLine; Justice Department Secures Over &dollar;3 Million Redlining Settlement Involving ESSA Bank &amp&semi; Trust in Philadelphia<&sol;p>&NewLine;<div class&equals;"mh-content-ad"><script async src&equals;"https&colon;&sol;&sol;pagead2&period;googlesyndication&period;com&sol;pagead&sol;js&sol;adsbygoogle&period;js&quest;client&equals;ca-pub-9162800720558968"&NewLine; crossorigin&equals;"anonymous"><&sol;script>&NewLine;<ins class&equals;"adsbygoogle"&NewLine; style&equals;"display&colon;block&semi; text-align&colon;center&semi;"&NewLine; data-ad-layout&equals;"in-article"&NewLine; data-ad-format&equals;"fluid"&NewLine; data-ad-client&equals;"ca-pub-9162800720558968"&NewLine; data-ad-slot&equals;"1081854981"><&sol;ins>&NewLine;<script>&NewLine; &lpar;adsbygoogle &equals; window&period;adsbygoogle &vert;&vert; &lbrack;&rsqb;&rpar;&period;push&lpar;&lbrace;&rcub;&rpar;&semi;&NewLine;<&sol;script><&sol;div>&NewLine;<p>The Justice Department announced today that ESSA Bank &amp&semi; Trust &lpar;ESSA&rpar; has agreed to pay over &dollar;3 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining majority-Black and Hispanic neighborhoods in and around Philadelphia&period; Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race&comma; color or national origin of the residents in those communities&period;<&sol;p>&NewLine;<p>The complaint filed in federal court today alleges that from at least 2017 to 2021&comma; ESSA failed to provide <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;category&sol;mortgage&sol;amp&sol;" title&equals;"mortgage" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"144">mortgage<&sol;a> lending services and did not serve the credit needs of majority-Black and Hispanic neighborhoods in the Philadelphia metropolitan area&period;<&sol;p>&NewLine;<p>&OpenCurlyDoubleQuote;For too long&comma; residents of communities of color have been unlawfully denied equal access to credit and shut out of economic opportunities&comma;” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division&period; &OpenCurlyDoubleQuote;When banks engage in redlining&comma; they perpetuate existing patterns of segregation and widen the racial wealth gap in our country&period; This resolution makes clear our commitment to holding banks and <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;amp&sol;" title&equals;"financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"1005">financial<&sol;a> institutions accountable for modern day redlining while ensuring access to fair lending in communities of color&period;”<&sol;p>&NewLine;<p>&OpenCurlyDoubleQuote;Accessing the American dream of owning your own home is possible only when there is equality for all in their opportunities to access lending in the residential mortgage markets&comma;” said U&period;S&period; Attorney Jacqueline C&period; Romero for the Eastern District of Pennsylvania&period; &OpenCurlyDoubleQuote;Redlining in Greater Philadelphia has deep roots&semi; it’s led to decades of disinvestment in communities of color&period; We appreciate ESSA’s prompt cooperation with the department’s investigation and their efforts that will aim to infuse lending resources and help build wealth in neighborhoods of color&period;”<&sol;p>&NewLine;<p>Under the proposed consent order&comma; which is subject to court approval&comma; ESSA has agreed to invest at least &dollar;2&period;92 million in a <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;category&sol;loans&sol;amp&sol;" title&equals;"loan" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"324">loan<&sol;a> subsidy fund to increase access to credit for home mortgage&comma; improvement and refinance loans&comma; as well as home equity loans and lines of credit&comma; in majority-Black and Hispanic neighborhoods in the bank’s lending area&period; ESSA has also agreed to spend an additional &dollar;125&comma;000 on community partnerships and &dollar;250&comma;000 on advertising&comma; outreach&comma; consumer financial education and credit counseling&comma; in an effort to expand the bank’s services in majority-Black and Hispanic communities&period; The consent order also requires the bank to hire two new mortgage loan officers to serve its existing branches in West Philadelphia and conduct a research-based market study to help identify the needs for financial services in communities of color&period;<&sol;p>&NewLine;<p>The department opened its investigation into ESSA’s lending practices after receiving a referral from the Federal Deposit Insurance Corporation&period; ESSA fully cooperated with the department’s investigation and worked expeditiously to resolve these allegations&period;<&sol;p>&NewLine;<p>In October 2021&comma; the department launched its Combating Redlining Initiative as a coordinated enforcement effort to address this persistent form of discrimination against communities of color&period; Since the initiative was launched&comma; the department has announced seven redlining cases and settlements and secured &dollar;87 million in relief for communities of color that have been victims of lending discrimination across the country&period;<&sol;p>&NewLine;<p>More information about the department’s fair lending enforcement can be found at <a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;crt&sol;housing-and-civil-enforcement-section" rel&equals;"noreferrer noopener" >www&period;justice&period;gov&sol;fairhousing<&sol;a>&period; Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online&period;<&sol;p>&NewLine;<p> Attachment&lpar;s&rpar;&colon; <img title&equals;"application&sol;pdf" src&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;modules&sol;file&sol;icons&sol;application-pdf&period;png"&sol;> <a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;opa&sol;press-release&sol;file&sol;1585786&sol;download" rel&equals;"noreferrer noopener" >Download Consent Order&period;pdf<&sol;a><img title&equals;"application&sol;pdf" src&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;modules&sol;file&sol;icons&sol;application-pdf&period;png"&sol;> <a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;opa&sol;press-release&sol;file&sol;1585791&sol;download" rel&equals;"noreferrer noopener" >Download Complaint&period;pdf<&sol;a>Topic&lpar;s&rpar;&colon; Civil RightsFair HousingComponent&lpar;s&rpar;&colon; <a href&equals;"http&colon;&sol;&sol;www&period;justice&period;gov&sol;crt&sol;" rel&equals;"noreferrer noopener" >Civil Rights Division<&sol;a><a href&equals;"http&colon;&sol;&sol;www&period;justice&period;gov&sol;crt&sol;about&sol;hce&sol;" rel&equals;"noreferrer noopener" >Civil Rights &&num;8211&semi; Housing and Civil Enforcement Section<&sol;a>Press Release Number&colon; 23-615 <&sol;p>&NewLine;<p> Updated May 31&comma; 2023<a href&equals;https&colon;&sol;&sol;www&period;justice&period;gov&sol;opa&sol;pr&sol;justice-department-secures-over-3-million-redlining-settlement-involving-essa-bank-trust>Original Article<&sol;a><&sol;p>&NewLine;