Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis might stand to benefit from a U.S. Department of Justice settlement with two Cincinnati-based banks, which have agreed to spend $9 million to settle a federal claim of biased mortgage lending in predominantly black neighborhoods.
The DOJ says Union Savings Bank and Guardian Savings Bank engaged in the practice of "redlining" in black neighborhoods in the Ohio cities of Cincinnati, Columbus and Dayton, and in Indianapolis from at least 2010 until 2014. The two banks have the same owners—businessmen Louis Beck and Harry Yeaggy.
The banks have agreed to invest at least $9 million in black neighborhoods in the four cities and open two full-service branches and a loan center.
Union Savings Bank, which has a branch in the Castleton area at 5881 E. 82nd St., did not say how much of the settlement figure would be directed locally.
"The agreement is designed to assist borrowers in all of the bank's lending areas, including in Hamilton and Marion Counties,” spokesman Keith Borders said Thursday. "The specific details of that assistance in each area will be determined as the agreement begins implementation."
The lawsuit points out that Union’s Indianapolis branch is located “approximately 4 miles north of the closest of that city’s majority-black census tracts.”
It also found that Union generated 20,329 mortgage-loan applications in the Indianapolis area between 2010 and 2014, but just 2.9 percent of those applications were received from majority-black tracts. Comparable lenders in Indianapolis received 7.7 percent of their applications from majority-black census tracts.
The banks' chairman said in a statement given to The Columbus Dispatch that the institutions "strongly" disagree with the DOJ's conclusions but will provide more lending opportunities to "improve the financial futures" of individuals, families and communities.
That includes a $7 million investment in a loan subsidy fund to increase the amount of credit that Union and Guardian extend to residents of predominately African-American neighborhoods, according to the DOJ.
It will also include about $2 million in advertising and outreach in those cities.
The Indiana Civil Rights Commission told IBJ it did not have any cases filed with regard to redlining or complaints against Union Savings Bank between 2010 and 2014.
Union Savings also has Indiana branches in Bloomington, Columbus and Fort Wayne.
Please enable JavaScript to view this content.