New York State Sues Bank for Racist Mortgage Practices

By Julissa Catalan


The state of New York filed a lawsuit against a Buffalo-based bank on Tuesday for the racist practice of denying mortgage loans to the Black community.

According to The New York Times, Evans Bank first began cutting off loan services to Blacks in 2009.

Per New York Attorney General Eric Schneiderman’s investigation, Evans Bank refused to solicit Black customers and market mortgages in the East Side neighborhood of Buffalo—where more than three-quarters of the city’s Black population resides.

As proof, prosecutors pointed to the bank’s print promotion efforts, which appeared in local newspapers that were not circulated in the East Side. The lawsuit also states that the bank refused to have branches in the East Side.

Out of Evans’ 14 branches in New York state, 11 were in Buffalo’s suburbs—where the majority of the population is white.

The suit claims that the bank “redlined” the city and only targeted a “trade area” that excluded more than 85,000 underrepresented community members—well before a credit check was even processed.

In addition, the lending policy strategically excludes Blacks. For example, the “Evans Community Solution” loan was only available to those who live within the trade area.

Redlining—identifying and excluding Black neighborhoods considered too risky for lending—was a practice used by banks in the 1930s, before it became illegal thanks to the Fair Housing Act.

“It is crucial that all New Yorkers, regardless of the color of their skin or the racial composition of their neighborhood, be afforded an equal opportunity to obtain credit,” Schneiderman said.

David J. Nasca, President and CEO of Evans Bank, countered, “We believe that the allegations being made by the New York state attorney general are unfounded and without substance, and we will vigorously defend this complaint through the legal system.” He added that the bank is “confident that our residential lending practices meet all applicable laws and regulations.”

According to a 2010 census, Buffalo already ranked as one of the most racially segregated areas in the country, and prosecutors fear Evans Bank’s practices are only furthering the divide.

The lawsuit states that the Home Mortgage Disclosure Act—a federal law requiring banks to report data on their loans so that regulators can identify patterns of racial discrimination—showed a startling pattern within Evans Bank from 2009 to 2012.

Of the 1,114 applications received by Evans for residential mortgages, only four were from Black perspective borrowers.

Even more alarming is that out of all the banks in the area, Evans “drew mortgage applications from African-American borrowers and East Side borrowers at by far the lowest rate.”

Even banks without an office in Buffalo still managed to make loans to Blacks at more than “double the rates that Evans did,” the suit states.

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