PROVIDENCE, R.I. (WJAR) — The U.S. Attorney’s Office for the District of Rhode Island and the U.S. Department of Justice announced an agreement Wednesday with Washington Trust Company worth millions of dollars to resolve allegations of lending discrimination.
Authorities said the bank agreed to pay $9 million to resolve allegations of a pattern or practice of lending discrimination against majority-Black and Hispanic neighborhoods in Rhode Island.
“Everyone who pursues the American dream has the right to expect to be treated equally and with dignity, regardless of their race, their background, or zip code. When communities are denied access to fair lending, families are denied the opportunity to build stability and financial success,” U.S. Attorney Zachary A. Cunha said in a statement.
The complaint alleges that from 2016 through at least 2021, Washington Trust failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods in Rhode Island after the bank expanded.
Authorities allege that the bank never opened a branch in majority-Black and Hispanic neighborhoods. The complaint further alleges that over that time even when the bank generated loan applications from majority-Black and Hispanic areas, the applications themselves were disproportionately White.
The $9 million settlement agreement filed in court includes $7 million in a loan subsidy fund to increase loans in majority Black and Hispanic neighborhoods.
That’s the amount federal prosecutors believe equals the lending that did not occur in those areas by Washington Trust.
Washington Trust released the following statement:
Washington Trust has entered into a settlement agreement with the U.S. Department of Justice that resolves alleged violations of fair lending laws in Rhode Island from 2016 to 2021. We vehemently deny the allegations and have entered into this agreement solely to avoid the expense and distraction of potential litigation, and to allow the Bank to focus fully on serving the needs of its customers in all communities. We believe that through our focus on providing affordable loan programs and offering innovative lending solutions to potential homebuyers across all Rhode Island communities, we have been fully compliant with the letter and spirit of fair lending laws. We have agreed to do more of what we are already doing—delivering a consistently superior banking experience to each and every member of the Rhode Island community. We value our relationships with our employees, customers, and communities
The deal has to be approved by a judge.
The bank has also committed to opening two branches in neighborhoods that are majority Black and Hispanic.