In a striking blow to one of the country’s long-standing financial pillars, Rhode Island-based Washington Trust Co. of Westerly is settling for a staggering $9 million. This move comes in response to accusations made by the U.S. Department of Justice (DOJ) that the community bank engaged in racial discrimination within its residential mortgage lending operations in Rhode Island.
The Allegations: Avoidance in Black and Hispanic Neighborhoods
The heart of the controversy? Washington Trust allegedly sidestepped offering home loans and pertinent mortgage services to Black and Hispanic communities. Such behavior, if true, is a clear breach of federal fair lending laws. Imagine the iconic American dream – a picket fence, a slice of apple pie, a family home – and then picture it being systematically denied to specific groups based on their racial or ethnic background. That’s the gravity of the allegations against Washington Trust.
Breaking Down the $9M Settlement
To address these hefty accusations, Washington Trust isn’t simply writing a check and walking away. Instead, they’ve committed at least $9 million to various endeavors intended to right their supposed wrongs. This includes funding a loan subsidy program, strengthening community partnerships, bolstering advertising, expanding outreach, and more. All these efforts are meticulously detailed in a proposed consent order currently awaiting approval from the Rhode Island federal court.
Rhode Bank $9M Settlement : Denial but Willingness to Settle
As the legal process unfolds, the storm clouds of contention continue to gather. Accompanying the proposed order was a complaint highlighting the government’s detailed allegations of redlining against the bank. And while Washington Trust has voiced a firm denial of these allegations, they’ve still chosen the path of settlement, indicating a desire to put the matter to rest.