On May 29, 2014, the City of Providence, Rhode Island, filed a lawsuit in federal court against Santander Bank, N.A., accusing the bank of discrimination in mortgage lending. The City alleges that since 2009, Santander has deliberately discriminated by refusing to make prime mortgage loans available in minority neighborhoods, in violation of the federal Fair Housing Act. Since it purchased Sovereign Bank in 2009, Santander Bank has had a substantial share of the city’s mortgage lending market.
The City is represented in the lawsuit by the civil rights law firm Relman, Dane & Colfax. The law firm alleges that the bank has engaged in “old-fashioned redlining” by “intentionally disinvesting from minority neighborhoods starved for prime loans.” This disinvestment leads to increased foreclosures, depressed property values, and causes a “tangible and substantial” harm to residents of the City.
According to a press release issued by the Relman law firm:
The suit identifies a “race gap” by comparing Santander’s increased lending in white neighborhoods since the takeover – up 25% – to its decreased lending in minority neighborhoods – down 63%. Santander’s dramatic race gap makes it a clear outlier and stands in stark contrast to many of its peers, which have performed far better in Providence and throughout New England. In support of the Complaint, declarations from officials at three of the city’s leading community development corporations explain that Santander has ignored the minority neighborhoods where these CDCs work to identify and educate qualified homebuyers.
Click here to read the press release announcing the lawsuit.
Click here to read the New York Times article on the lawsuit.