British Bank Commits $25 Million to Partnership with Nonprofit Focused on Financial Equality after Redlining Allegations

In response to a complaint alleging fair lending violations that a nonprofit focused on financial equality filed with HUD, a British bank agreed to invest $25 million in a partnership with the nonprofit to support underserved communities. 

After receiving the nonprofit’s complaint, HUD began investigating whether the bank violated the Fair Lending Act through allegedly discriminatory lending practices in majority Black and Hispanic neighborhoods in six major metropolitan areas from 2018 to 2021.  Later, though, the nonprofit withdrew its complaint and opted to negotiate with the bank.

As a result of the negotiations, the parties agreed to form a partnership, which will begin in January of 2025, to expand economic opportunities in diverse, underserved low- and moderate-income communities.  Notably, the bank will devote $10 million to loan subsidies, $4 million to grants to community development financial institutions (lenders whose mission is to offer financing in underserved communities) and community nonprofits, $6 million as a direct donation to the nonprofit, and $1 million toward community engagement activities.