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Thursday, November 7, 2024

Justice Department settles historic redlining case with Citadel Federal Credit Union

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Lisa O. Monaco Deputy Attorney General | Official Website

The Justice Department has announced a settlement with Citadel Federal Credit Union, which will see the credit union pay over $6.5 million to address allegations of redlining in predominantly Black and Hispanic neighborhoods around Philadelphia. This marks the first time the department has reached such an agreement with a credit union, as part of its Combating Redlining Initiative.

Redlining is described as an illegal practice where lenders avoid offering credit services to communities based on race, color, or national origin. Assistant Attorney General Kristen Clarke stated, "This redlining settlement marks the Justice Department’s very first resolution involving a credit union, making clear our intent to hold all types of lenders accountable for their role in modern-day redlining."

U.S. Attorney Jacqueline C. Romero highlighted the impact of redlining on Philadelphia's communities of color: "We know that redlining has a devastating impact on a family’s finances and future, and results in economic and other inequalities that plague our communities for decades."

The complaint filed by the Justice Department alleges that from 2017 to 2021, Citadel focused its mortgage lending efforts disproportionately on white areas around Greater Philadelphia while neglecting majority-Black and Hispanic neighborhoods. The complaint also notes that Citadel's branches are primarily located in majority-white neighborhoods.

Under the proposed consent order awaiting court approval, Citadel will invest $6.52 million to improve credit access for communities of color in Philadelphia. This includes establishing a $6 million loan subsidy fund for home loans in these neighborhoods and spending at least $250,000 on community partnerships related to financial education and foreclosure prevention.

Citadel has also agreed to open three new branches in predominantly Black and Hispanic neighborhoods in Philadelphia and hire a community lending officer to enhance lending efforts within these communities.

Citadel cooperated with the investigation conducted by the Justice Department. The credit union operates 24 branches across Greater Philadelphia with assets totaling approximately $6 billion.

Since launching its Combating Redlining Initiative in October 2021, led by Attorney General Merrick B. Garland and Assistant Attorney General Clarke, the Justice Department has resolved 14 cases related to redlining nationwide.

For more information about fair lending enforcement work or to report discrimination, individuals can visit www.justice.gov/fairhousing or call 1-833-591-0291.

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