Denver, CO, 06/09/2014 (Stocksntrade) – Redlining, which had starved various minority communities of the loans to buy homes, has now allegedly returned in New England. The City of Providence has now sued Banco Santander, S.A. (ADR) (NYSE:SAN), Bank N.A & has the bank of curtailing mortgage-lending to the black and Hispanic residents, even as it very aggressively pursued white borrowers- in the practice called redlining. The city officials said that the applications to the bank for the prime loans from the minority neighborhoods dropped by over 60% in the recent years. In addition, the Providence lawsuit said that the bank is now practicing very similar lending bias in other areas in New England, including in Boston.
A Washington, D.C.-based lawyer, John Relman, representing Providence said that Redlining is now back again. There’s been some drying up of credit within the minority community. All these allegations have been denied by Santander which is owned by Banco Santander, S.A. (ADR) (NYSE:SAN), the Spanish banking giant & its U.S headquarters are in Boston. In a statement, Mary Ellen Higgins a spokesperson for the bank said that they categorically reject the accusation & will very vigorously defend themselves against legal action. But, they are willing to also work with the City of Providence in order to allay all its concerns.
Redlining had become a massive issue in 1992, and the Boston Federal Reserve Bank had published its landmark study that found the systemic racial discrimination in the mortgage lending amongst the banks in the region. This study led to the federal & state investigations into literally dozens of banks. The Shawmut Bank had paid its $960,000 settlement that was related to the lending practices at that time. In 2012, Ben Bernanke, who was the Fed chairman had voiced concerns that the tighter lending-practices post the fiscal crisis has made it so much harder for black & Hispanic people to then borrow in comparison white people.