What happened
On January 12, 2023, the Justice Department sued City National Bank in the Central District of California. The complaint alleged that from 2017 through at least 2020 the bank redlined majority-Black and Hispanic neighborhoods in Los Angeles County, avoiding credit services because of race, color, and national origin, in violation of the Fair Housing Act and the Equal Credit Opportunity Act. Reuters reported the government said the bank took fewer applications in those neighborhoods than other lenders and had opened only one branch there in 20 years. Those are allegations. The consent order itself records that the bank denied the redlining charges except as needed to establish jurisdiction.
The court entered the consent order on January 31, 2023. The department’s case page requires at least $29.5 million in a loan subsidy fund, $750,000 for community partnerships, $500,000 for advertising and outreach, and $500,000 for financial education. Reuters described the package as a $31 million settlement and as the department’s largest redlining settlement at the time. In a statement Reuters quoted, City National said it disagreed with the allegations but supported equal access to credit regardless of race. Ordered subsidies are not generosity.
The Cookout read
Mixed. Who gets a mortgage in Black Los Angeles neighborhoods is a civil-rights question with a federal caption. The dollars are a consent order, not a jury verdict, and the bank put its disagreement on the record. This file will not relabel $29.5 million in required loan subsidies as a gift, or pretend the complaint named Black neighborhoods only—it named majority-Black and Hispanic census tracts together.