DOJ seeks $9 million settlement with Ameris Bank for redlining practices in Jacksonville

A settlement with Ameris Bank could flow $9 million into Jacksonville’s majority Black and Hispanic neighborhoods to combat modern-day redlining practices, the Department of Justice announced Thursday.

U.S. Attorney General Merrick Garland and Assistant Attorney General Kristen Clarke of the Civil Rights Division made the announcement in Jacksonville’s Eastside – one of the city’s historically Black neighborhoods affected by redlining, a type of housing discrimination with roots in the 1930s.

The DOJ alleged the bank kept Jacksonville communities of color from lending opportunities for years, contributing to a systematic economic decline.

“By taking on the discriminatory lending practices of banks and mortgage companies, we're helping to ensure that more Black, Hispanic and other communities of color are able to buy a home, generate wealth and fulfill the American dream,” Clarke said.

“This settlement marks a new pinnacle in our efforts to bring an end to redlining and provides tangible relief to communities that have been starved of access to credit for far too long.”

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Garland and Clarke are the most recent figures to visit the city as Jacksonville – and the state at large – has become a significant talking point in national conversations regarding racial equity. Politicians have zoomed in on the city in recent months to criticize Gov. Ron DeSantis’ educational policies and decry access to semi-automatic weapons.

Locally, state representatives for the city called on the DOJ in August to investigate the Duval County jail for a rise in its death rate among inmates, as reported by nonprofit news outlet The Tributary. The office inputted the request for internal review, but Garland did not provide an update during Thursday’s press conference.

Clarke: 'We will not stand idly by'

The Jacksonville settlement is the latest in the office’s “Combat Redlining Initiative” that began in 2021 and has since secured $100 million to fight the practice through similar lawsuits.

The DOJ alleged Ameris Bank, based in Atlanta, failed “to open even a single branch” in a Jacksonville majority Black or Hispanic neighborhood but opened 18 full-service branches elsewhere in the city. In another instance, the bank sent 22,000 free checking mailers in 2020 with images of white models to 13 ZIP codes but none reached “a single resident” living in a majority Black or Hispanic area.

The bank closed its only branch in a minority neighborhood in 2019 during an “efficiency initiative” despite calling the branch one of its “best financial performers” in the country, Garland said.

Between 2016 and 2021, however, similar institutions generated loan applications in the same communities of color at over three times Ameris’ rate, Garland said.

Ameris issued a statement after the press conference disagreeing "with any suggestion that we have engaged in discriminatory conduct." The company's CEO, Palmer Proctor, said the bank cooperated with the DOJ's investigation and agreed to the settlement to "avoid the distraction of litigation" and focus on providing housing opportunities.

"The terms of this settlement are consistent with the bank’s existing programs and initiatives," Proctor said. "We condemn discrimination in any form and remain committed to helping people in underserved communities gain equal opportunity to achieve homeownership, as well as access to banking services.”

If approved by a federal judge, a majority of the settlement funds – $7.5 million – will go toward loan subsidies for residents of majority Black and Hispanic neighborhoods. The subsidies will be distributed through Ameris and capped at $20,000 to have a “meaningful benefit” to a wide range of people, Garland said.

The funds would also invest $900,000 for advertising and outreach and $600,000 to develop community partnerships in the affected neighborhoods.

Ameris will also be obligated to open a new branch north of the St. Johns River in a majority-Black and Hispanic neighborhood and ensure at least three mortgage loan officers are dedicated to serving the residents.

The bank will additionally hire a consultant to assess the institution’s compliance management system and a full time director of community lending.

Neither Garland or Clarke commented on if any other Jacksonville institutions faced similar DOJ investigations.

“We encourage financial institutions to proactively assess their redlining risk and immediately take corrective action to reach underserved communities in their market areas,” Clarke said. “We will not stand idly by while financial institutions avoid communities of color in their markets, or erect barriers that make it harder for residents in underserved communities to receive lending opportunities.”

Mayor Donna Deegan did not attend the press conference but thanked the DOJ for its efforts after the announcement.

"The scourge of redlining has negatively impacted Jacksonville communities of color for far too long," Deegan said in a statement. "I am gratified that Attorney General Garland and the Department of Justice is making investigations into redlining a priority and hope this settlement will provide some relief for families who were denied the opportunity to obtain access to home ownership."

What is redlining? What history does it have in Jacksonville?

Redlining has come in recent years to recognize a wide application of housing discrimination practices against communities of color, which is illegal under the Fair Housing Act and the Equal Credit Opportunity Act, but the coordinated practice began in the 1930s.

It became a segregation tool in the aftermath of the Great Depression when the federal government mapped cities across the country to guide banks away from neighborhoods with perceived lending risks. This predominantly placed communities of color, primarily Black communities, “in the red” and kept Black residents from obtaining home improvement loans, mortgages or refinancing options.

In Jacksonville, the practice allowed neighborhoods with a majority of white residents to grow and thrive while property values dropped in areas like the Eastside.

“As today’s case makes clear, redlining is not just a relic of the past,” Garland said. “Indeed, some of the neighborhoods that we allege Ameris redlined are some of the same neighborhoods that federal agencies originally redlined beginning in the 1930s.”

Over the past year, Jacksonville politicians have worked to face the post-pandemic affordable housing crisis affecting cities across the country. Aspects of the modern housing problems for communities of color, however, date back to redlining, Dawn Gillman of Changing Homelessness told the Times-Union.

“We often say historically underserved neighborhoods, many of them are underserved because of redlining,” Gillman said.

In her studies of historic redlining, Gillman said she saw some of the most stark disparities after World War II. Black soldiers were denied access to federally subsidized homes or loans allowed to white soldiers and were therefore unable to build the same generational wealth.

Those redlined communities of color have since additionally been subjected to problematic zoning laws, Gillman said. The majority of the city – including in predominantly white neighborhoods – is zoned for single-family housing. Communities redlined, however, remain underinvested in for new construction of multi-family units.

Looking at racial equity therefore has to go beyond one person or situation, Gillman said.

“It's these older laws, that while they have been taken away, their effects are still remaining, and they still have consequences today,” Gillman said. “To make it more equitable for everybody in our community, we've got to look at how do we reinvest or invest more in those communities that were denied the investment all those years ago.”

This article originally appeared on Florida Times-Union: AG Garland seeks Ameris Bank redlining settlement in Jacksonville