The Justice Department and two locally owned banks have reached a settlement over so-called "redlining."
Union Savings Bank and Guardian Savings Bank were accused of limiting services to some African-American communities. The accusations were centered in neighborhoods in and around Cincinnati, Dayton, Columbus, and Indianapolis. The Fair Housing Act and the Equal Credit Opportunity Act prohibits financial institutions from discriminating on the basis of race and color in mortgage lending practices.
Under the terms of the settlement, the banks have agreed to open three new branches in predominately African-American neighborhoods in those cities. US Attorney Ben Glassman says the branches would be in Forest Park, Corryville, and Xenia.
Glassman says the banks, which are operated separately but jointly owned, will also create a $7 million fund to increase loans to minorities. Another $2 million will go toward advertising, outreach and financial education efforts.
The settlement still has to be approved by a court.