On February 27, 2023, the Department of Justice (DOJ) entered into a consent order with Park National Bank. The Order alleges that Park National Bank (“PNB”) engaged in a pattern or practice of unlawful redlining in violation of the Fair Housing Act (“FHA”), and the Equal Credit Opportunity Act (“ECOA”), and Regulation B, by discriminating on the basis of race, color, and national origin. Specifically, the United States alleges that PNB engaged in:
- Illegal redlining by avoiding providing home loans and other mortgage services in majority-Black and Hispanic census tracts in its Assessment Areas (“Columbus AAs” or “the AAs”) under the Community Reinvestment Act (“CRA”), located within the Columbus, Ohio Metropolitan Statistical Area (“Columbus MSA””).
- Conduct that would discourage mortgage applications from prospective applicants who are residents of or seeking credit in majority-Black and Hispanic census tracts within the Columbus AAs.
PNB is a multi-state bank headquartered in Newark, Ohio. PNB offers commercial, consumer, mortgage, and wealth management banking services. PNB operates a total of 92 full-service branches and two loan production offices in Ohio, Kentucky, North Carolina, and South Carolina, including 20 full-service branches in the Columbus MSA. PNB has total assets of $9.8 billion. Park National Bank is the sole banking subsidiary of Park National Corporation, a holding company.
Major terms of the Order include:
- Stop Discrimination – PNB, including all of its officers, agents, servants, employees, and all other persons in active concert or participation with them who have actual notice of this Consent Order, assignees, and successors in interest, is hereby enjoined from engaging in any act or practice that discriminates on the basis of race, color, or national origin that: (a) violates the FHA in any aspect of a residential real estate-related transaction; or (b) violates ECOA and Regulation B in any aspect of a credit transaction.
- Training:
- Within 30 days of the Effective Date, PNB will provide a copy of the Complaint and Consent Order in this matter to all employees with substantive involvement in mortgage lending, marketing, or fair lending or CRA compliance, or who have management responsibility over such employees; senior management with fair lending and marketing oversight; and members of the Board of Directors (collectively, “the Relevant Bank Staff and Officials”).
- Implement a system for each individual to acknowledge that they received a copy of the Complaint and Consent Order and had the opportunity to ask questions.
- The training will be conducted by an independent, qualified third-party trainer selected by PNB and subject to non-objection by the United States.
- PNB will implement a system for each individual to acknowledge that they completed fair lending training and will provide a report that includes these acknowledgements to the United States 30 days after it has delivered the training.
- PNB will provide the training described in Paragraph 9 annually to the Relevant Bank Staff and Officials. PNB will implement a system for each individual to acknowledge that they completed fair lending training.
- Any individual who becomes a Relevant Bank Staff or Official will:
- Within 30 days of beginning the covered position, receive a copy of the Complaint and Consent Order, with the opportunity to ask questions,
- Within 60 days of beginning the covered position, receive the training discussed above.
- Community Needs Assessment – PNB will submit to the United States for non-objection a Community Credit Needs Assessment for majority-Black and Hispanic census tracts within its Columbus Lending Area.
- The Community Credit Needs Assessment will be conducted by an independent, qualified third-party consultant selected by PNB and subject to non-objection by the United States.
- Director of Community Home Lending – PNB has created the full-time position of Director of Community Home Lending and Development (“Director of Community Home Lending”), who is designated with primary responsibility of overseeing the development of PNB’s lending in majority-Black and Hispanic census tracts in its Columbus Lending Area. The Bank will maintain this position throughout the term of this Consent Order.
- Physical Expansion – PNB must establish one new mortgage loan production office (“LPO”) and one new full-service branch in majority-Black and Hispanic census tracts in its Columbus Lending Area within 18 months of the Effective Date.
- Loan Subsidy Fund – PNB will invest a minimum of $7.75 million in a loan subsidy fund to increase credit for home mortgage loans, home improvement loans, home refinance loans, and home equity loans and lines of credit for consumers applying for loans in majority-Black and Hispanic census tracts in its Columbus Lending Area.
- Community Development Partnership – PNB will partner with one or more community-based or governmental organizations that provide the residents of majority-Black and Hispanic census tracts in the Columbus Lending Area with services related to credit, financial education, homeownership, and foreclosure prevention. Through these partnerships, PNB must spend a minimum of $500,000 over the term of this Consent Order on services to residents of majority-Black and Hispanic census tracts in the Columbus Lending Area that increase access to residential mortgage credit.
- Advertising, Outreach Consumer Education and Counseling – PNB will spend at least $150,000 per year on the advertising, outreach, consumer financial education, and credit counseling in the Columbus Lending Area described in this Subsection.
- Term of the Order – The requirements of this Consent Order will remain in effect for five years. If, within five years of the Effective Date, PNB has not invested all money in the loan subsidy fund, this Consent Order will remain in full effect until three months after PNB has invested all the money in the loan subsidy fund and has submitted a final report to the United States that demonstrates the fulfillment of this obligation.