Updated April 20 at 9:53pm

Suit: Bank bypassing minorities

By Rhonda J. Miller
PBN Staff Writer

As pockets of the real estate market in Rhode Island climb out of the economic sludge of recession, Providence’s minority neighborhoods have been purposely bypassed by Santander Bank’s prime mortgage lending, according to a May 29 lawsuit filed by the city against the U.S. operations of the Madrid-based bank. More

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BANKING

Suit: Bank bypassing minorities

Posted:

As pockets of the real estate market in Rhode Island climb out of the economic sludge of recession, Providence’s minority neighborhoods have been purposely bypassed by Santander Bank’s prime mortgage lending, according to a May 29 lawsuit filed by the city against the U.S. operations of the Madrid-based bank.

And Providence is not the only area the bank is avoiding lending in minority neighborhoods, according to plaintiffs.

“If you look at Santander’s lending … in much of New England, the data is stark and powerful – and indicates that Providence is merely the tip of the iceberg,” said attorney John Relman of the Washington, D.C.-based firm of Relman, Dane & Colfax, who filed the lawsuit for the city.

Santander quickly issued a statement rejecting the accusations. The bank also offered to work with the city “to allay its concerns,” but declined requests from Providence Business News to discuss the U.S. District Court suit and the bank’s approach to minority lending.

For Christopher Samih-Rotondo, a community organizer for Providence-based Direct Action for Rights and Equality, the lawsuit is a welcome response to what he called a longstanding “foreclosure crisis” in the city.

“Based on my work, which is mainly knocking on doors of homes that are scheduled for foreclosure sales, I’d say it’s a long overdue action by the city … considering the amount of abandoned homes and the issues of access to credit and mortgages, and affordable housing,” he said.

The lawsuit alleges that the bank violated the requirements of the Fair Housing Act by discriminating against the city’s minority communities by what is commonly known as “redlining, which refers to a practice of drawing a circle around an area and not lending into that area” because of concerns about creditworthiness of the residents, said Relman.

“We allege that Santander is disinvesting from the minority communities,” he said.

The lawsuit includes testimony from Raymond Neirinckx, who is the housing-commission coordinator at the Office of Housing and Community Development for the R.I. Department of Administration’s Division of Planning.

06914Page One, R.I. Department of Administration, financial services, law, public policy, government, regulation¸ Direct Action for Rights and Equality, Santander Bank, lawsuit, Changing Patterns: Mortgage Lending to Traditionally Underserved Borrowers and Neighborhoods in Boston, Greater Boston and Massachusetts 2012, financial services, law, public policy, government, regulation, social welfare, economy, 29~10, issue060914export.pbn
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