Washington Trust accused of redlining majority-Black and Hispanic neighborhoods between 2016 and 2021
Washington Trust Company, a community bank based in Providence, Rhode Island, has agreed to pay $9 million to resolve allegations of discriminatory lending practices, specifically redlining majority-Black and Hispanic neighborhoods. The settlement comes after a U.S. attorney announced that the bank failed to offer mortgage services to these communities between 2016 and 2021.
The complaint filed against Washington Trust claimed that despite expanding its operations across the state, the bank never opened a branch in areas with large Black and Hispanic populations. Investigators pointed to this failure as evidence of discriminatory practices aimed at limiting access to mortgage lending in these neighborhoods.
The bank, which has been in operation since 1800 and is the oldest community bank in the United States, strongly denied the allegations. Washington Trust CEO Edward O. “Ned” Handy III stated that the bank rejected the claims but chose to enter into the settlement to avoid the time and cost of a potential legal battle. The decision to settle also allows the bank to focus on serving its customers and communities without the distraction of litigation.
While the $9 million settlement resolves the immediate concerns, it is a reminder of ongoing challenges related to fair lending practices. The settlement also underscores the importance of addressing redlining and ensuring that communities of color have equal access to financial services.
The Justice Department’s intervention highlights the continued efforts to combat discriminatory practices in the housing and lending sectors. Redlining, a practice that historically denied mortgage loans to people based on the racial or ethnic makeup of their neighborhoods, remains a significant issue that has long-lasting effects on wealth and opportunity disparities.
For Washington Trust, the settlement marks a significant step in addressing these allegations. However, it also raises broader questions about the accessibility of banking services in communities that have historically been marginalized and the need for greater oversight of lending institutions to prevent discriminatory practices.
