Case: United States v. Park National Bank

This case concerns the Fair Housing Act (“FHA”) and the Equal Credit Opportunity Act (“ECOA”). On February 28, 2023, Merrick Garland, Attorney General of the United States, filed a complaint in the U.S. District Court for the Southern District of Ohio against Park National Bank (“PNB”). The complaint was filed following an investigation done as part of the DOJ’s Combating Redlining Initiative started in October of 2021.  The U.S. sought to remedy PNB’s alleged discriminatory practices in mortgage lending. The U.S. alleged that PNB’s business practices from 2015 to at least 2021 amounted to unlawful redlining in the Columbus, Ohio Metropolitan Statistical Area (“Columbus MSA”). The U.S. sought declaratory judgment, injunctive relief, damages, a civil penalty, and any additional relief justice may require. 

The U.S. alleged that PNB’s business practices were designed to and successfully discriminated against people of color in the Columbus MSA.  Of the 433 census tracts in the Columbus MSA, some 73 of them are majority Black and Hispanic. The bank’s self-designated assessment areas broke these tracts down into two, and one group called the Columbus Lending Area (“Columbus”) contained 375 census tracts, and with all of the 73 majority Black and Hispanic tracts contained therein. From 2015 to 2021, PNB had 36 unique branch locations open in Columbus (between 20 and 32 at a time), but not a single branch location was in a majority Black and Hispanic neighborhood. Additionally, few tracts bordering on majority Black and Hispanic neighborhoods contained branch locations.  Furthermore, the U.S. alleged that PNB was aware of these issues and failed to take adequate steps to mitigate them through advertising, outreach or in another manner.  As a result, PNB received disproportionately low home loan applications, and fewer successful home loans originating from majority-Black and Hispanic neighborhoods. Finally, PNB’s internal oversight committees were cognizant of these issues, but failed to follow through on stated plans to fix them.  The U.S. alleged that PNB’s practices and policies constituted unlawful redlining in violation of the FHA, and the ECOA. 

Also on February 28, 2023, a joint motion to approve a Consent Judgment by the plaintiff was filed. The consent judgment was signed on March 2, 2023 by Judge Edmund A. Sargus. The terms of the order were as follows:

1. PNB is to ensure that it provides equal opportunity for all to apply for and obtain credit regardless of the demographics of their census tract or the location of the property in question.
2. PNB produced a Fair Lending Status Report and Compliance Plan in concert with an independent, third-party consultant, and submitted it to the U.S. for review. The United States will have the right to object to the plan if it does not comply with the FHA or the ECOA.
3. PNB must provide all relevant employees with a copy of and explanation for the consent order, as well as training as to their obligations under the ECOA, Regulation B, and the FHA.
4. PNB must submit to the United States for non-objection a Community Credit Needs Assessment for the 73 majority Black and Hispanic census tracts in the Columbia Lending Area.
5. PNB created and will maintain the position of Director of Community Home Lending and Development to oversee the development of lending in majority Black and Hispanic census tracts in the Columbus Lending Area.
6. PNB must open one new mortgage loan production office and one full service branch in majority Black and Hispanic census tracts in the Columbus Lending Area. Reasonable efforts must be made to do so within 18 months of the Effective Date of the consent judgment.
7. PNB must invest a minimum of $7.75 million in a loan subsidy fund to increase credit in majority Black and Hispanic census tracts in the Columbus Lending Area.
8. PNB must partner with at least one community or government based organization in a Community Development Partnership Program.
9. PNB must spend at least $150,000 per year on advertising, outreach, education and counseling in majority Black and Hispanic census tracts in the Columbus Lending Area.

This consent order is to remain in effect for five years, or if PNB has not invested the requisite $7.75 million in a loan subsidy fund at the close of five years, then until three months after PNB has finished investing that money.