The Justice Department announced on Wednesday that Washington Trust, the nation's oldest community bank, has agreed to pay $9 million to settle accusations of lending discrimination against minority residents in Rhode Island. This move comes in response to the department's ongoing efforts to combat "redlining" practices.
The civil complaint, filed in Rhode Island federal court, alleges that Washington Trust failed to provide mortgage lending services to predominantly Black and Hispanic neighborhoods in Rhode Island for a period of at least five years, beginning in 2016. The bank is said to have operated without any branches in these minority communities, with mortgage loan officers solely based in majority-white areas.
As part of the settlement, Washington Trust has agreed to invest a minimum of $7 million in a loan subsidy fund. This fund aims to expand access to mortgages and other lines of credit for residents in minority communities. Additionally, the bank will allocate $1 million towards community partnerships that provide services aimed at increasing mortgage credit accessibility for these neighborhoods. Another $1 million will be used for advertising and outreach specifically targeting these residents.
To ensure better representation and improved service, Washington Trust will also open two branches in the minority neighborhoods and assign at least two mortgage loan officers to serve these areas.