A subsidiary in the U.S., RBC, has reached an agreement with the Department of Justice to pay US$ 31 million over allegations of discrimination by limiting mortgage lending in Black and Latino communities.
The Justice Department says the settlement reached with City National, which RBC bought in 2015, is the largest redlining settlement in the history of the department.
The agency stated that City National avoided marketing and underwriting mortgages in 2017 and 2020 in majority Black and Latino neighbourhoods in Los Angeles County, opening one branch in those neighbourhoods in the past 20 years.
Assistant Attorney General Kristen Clarke, who leads the Justice Department’s civil rights division, said in a statement that the settlement should send a strong message to the financial industry that the agency expects lenders to serve all members of a community.
The terms of the settlement stipulate that City National will create a $29.5-million loan subsidy fund for loans available to Black and Latino borrowers and will expend $1.75 million on advertising, community outreach and financial education programs for the benefit of minority borrowers.
In a statement, City National said it disagreed with the Justice Department’s allegations, but that it will “nonetheless support the DOJ in its efforts to ensure equal access to credit for all consumers, regardless of race.”
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