The Justice Department said in a complaint filed Thursday that $25.8 billion-asset Ameris Bancorp in Atlanta avoided originating home loans in majority-Black and Hispanic neighborhoods in Jacksonville, in some of the same areas that were first redlined by the Home Ownership Loan Corporation maps in the 1930s. The complaint alleges that from 2016 to 2021, comparable lending institutions generated home loans at three times the rate of Ameris, Attorney General Merrick B. Garland said at a press conference Thursday.

"Our complaint alleges that the bank denied or discouraged home loan applications and other credit opportunities and services in major Black and Hispanic neighborhoods here in Jacksonville," Garland said. "Redlining is not just a relic of the past. This kind of discrimination in lending violates federal law. And it is contrary to the promise of equal access to opportunity, upon which both our economy and our democracy depend."

The proposed consent order, filed in the U.S. District Court for the Middle District of Florida, alleges that Ameris violated the Fair Housing Act and the Equal Credit Opportunity Act, two federal civil rights laws that prohibit discrimination in lending.  

Garland said the Justice Department currently has two dozen active redlining investigations across the country. Once the Ameris settlement is approved, the agency will have secured $107 million from 10 lender institutions as part of the Justice Department's Combat Redlining Initiative that began two years ago and has led to investments in communities harmed by discriminatory lending practices, Garland said. 

"I think we have another 20 or so pending, open investigations, so this is not just a Jacksonville problem, not just an Ameris problem," Garland said. "We are looking all over the country."

Kristen Clarke, assistant attorney general for civil rights at the Justice Department, said that Ameris never operated a branch in a Black and Hispanic neighborhood in Jacksonville, even though majority Black and Hispanic census tracts account for nearly 20% of the bank's service area. 

"We found that in one-third of all majority Black and Hispanic neighborhoods in Jacksonville, Ameris did not obtain a single application over the entire six-year period," Clarke said.

The Justice Department alleged that Ameris specifically located its 18 branches in majority-white neighborhoods and closed a bank branch in an urban area that served minorities as a part of an "efficiency initiative," Garland said.

Palmer Proctor, the CEO of Ameris, said the bank cooperated with the Justice Department's investigation and entered into the settlement "to avoid the distraction of litigation and because we share the Department's goal of expanding access to homeownership in underserved areas."

"We strongly disagree with any suggestion that we have engaged in discriminatory conduct and are confident in our efforts to provide equal access to affordable mortgage products in the Jacksonville community and all the markets we serve," Proctor said in a press release. "The terms of this settlement are consistent with the Bank's existing programs and initiatives. 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."

In addition to the monetary settlement, the Justice Department is requiring Ameris to adopt meaningful changes to its business practices to promote fair lending.

Under the agreement, Ameris will provide a $7.5 million loan-subsidy fund to those seeking credit in communities that were redlined, Clarke said. In addition, the bank will invest $900,000 in advertising and outreach to affected communities, and $600,000 to develop community partnerships that increase access to home loans. The bank also has agreed to hire a third-party consultant to conduct an independent review of its fair lending program, said U.S. Attorney Roger B. Handberg for the Middle District of Florida. 

"The allegations brought in this case are significant and the message clear: Modern-day redlining will not be tolerated in the Middle District of Florida," Handberg said. 

In addition, Ameris has agreed to open a new branch in a majority-Black and Hispanic neighborhood in Jacksonville and ensure that at least three mortgage loan officers are dedicated to serving those communities. The bank also has agreed to employ a director of community lending to oversee the continued development of lending initiatives. 

"Banks and mortgage companies need not wait for the justice department to come knocking on their door," Clarke said at the press conference. "We encourage financial institutions to proactively assess their redlining risks, and immediately take corrective action."