Editorial: Redlining settlement reminds us systemic racism isn’t past history

CBC Editorial: Friday, Feb. 9, 2024; #8906

The following is the opinion of Capitol Broadcasting Company

Earlier this week North Carolinians were reminded, in stark economic terms, that institutional racism is very much present today and has a direct impact on African Americans and other minorities concerning the quality of their lives, choices of where they may make their homes and ability to access essential lending services.

North Carolina Attorney General Josh Stein, along with the U.S. Department of Justice and the U.S. Attorney’s office for the Middle District of North Carolina, announced a $13.5 million settlement with First National Bank of Pennsylvania – which had purchased North Carolina lender Yadkin Bank.

Yadkin Bank and its successor First National Bank “failed to provide mortgage lending services to predominantly Black and Hispanic neighborhoods in Charlotte and Winston-Salem, and discouraged people seeking credit in those communities from obtaining home loans. FNB’s home mortgage lending was focused disproportionately on white areas of Charlotte and Winston-Salem,” according to a statement from the U.S. Attorney’s office.

This lending practice, commonly known as “redlining,” was a way lending institutions – including federal government agencies – designated areas where minorities lived and therefore deemed them risky investments.

This wasn’t some legacy matter from the Jim Crow era – from say 1917, 1957 or even 1967. The complaint says all this had been going on from 2017 through 2021. Jim Crow may be the past, but the shadow of its legacy of discrimination still hangs over the lives of too many in North Carolina and the rest of our nation.

What might be a sign of improvement is this behavior seems to be the exception rather than the rule, as was the case during the pre-Civil Rights era.

“Other lenders generated applications in predominantly Black and Hispanic neighborhoods at two-and-a-half times the rate of FNB in Charlotte and four times the rate of FNB in Winston-Salem,” the U.S. Attorney’s office revealed. “FNB’s branches in both cities were also overwhelmingly located in predominantly white neighborhoods, with the bank closing its sole branch in a predominantly Black and Hispanic neighborhood in Winston-Salem in 2021.”

The complaint further alleges that FNB relied on mortgage loan officers working out of predominantly white areas to generate loan applications and that the bank did not track how its mortgage loan officers developed loan referrals or how they distributed the bank’s mortgage marketing materials.

What does all that add up to? It is the definition of systemic racism. In this case, it is a matter-of-fact way of doing business – just the way the system operates — resulting in racial discrimination. While not as starkly obvious as water fountains designated for use only by people of a certain race or signs banning service to patrons because of the color of their skin, the impact, insult and harm is the same.

Someone is denied a service, can’t pick a place to live or even borrow money at the same rate available to others – only because of the color of their skin.

What does this settlement reveal?

Awareness and vigilance about racism and discrimination cannot be denied or diminished.

Even in the 21st century – 159 years after the end of the Civil War; 56 years after the passage of the Fair Housing Act – discrimination – whether on the basis of race, ethnicity, gender or religion may not be overt but pervades the way we do business and the way government operates. Whether called institutional or systemic, racism remains too much a part of everyday lives.

As seen in this latest housing discrimination settlement, rightly addressing institutional racism openly, not denying or ridiculing those who seek a remedy, is the cure.

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