Washington Trust to pay $9 million over discriminatory lending

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(Reuters) – Washington Trust Bank, the largest community bank in the country, will pay $9 million to settle civil rights charges that it discriminated against primarily Black and Hispanic mortgage applicants in Rhode Island, the U.S. Justice Department announced on Wednesday.

The department’s complaint against the bank alleges that from 2016 through 2021, it engaged in a practice known as redlining by failing to provide lending services to residents in primarily Black and Hispanic neighborhoods in Rhode Island.

Top department officials said that despite expanding across the state, it never opened a branch in a Black or Hispanic neighborhood, and that it relied on mortgage loan officers working out of majority-white areas as the primary source for generating new lending applications.

An attorney for the bank could not be immediately reached.

“Through this agreement, we are sending a strong message to the financial industry that we will not stand for discriminatory and unlawful barriers in residential mortgage lending,” said Kristen Clarke, the Assistant Attorney General of the Justice Department’s Civil Rights Division, at a press conference on Wednesday.

Redlining refers to racial discrimination in lending practices by banks and other financial institutions, a practice that has harmed Black and Hispanic communities for decades.