Bank accused of redlining.

Navigation: Main page

Author: Townes, Glenn

National City Bank of the Midwest in Detroit, MI was slapped last week with a multimillion dollar lawsuit by a group of prominent AfricanAmerican businessmen who accuse the bank of discriminatory lending practices based on race, otherwise known as redlining.

New Galilee Missionary Baptist Church, Pleasant Hill Baptist Church and a former loan officer at the bank filed suit in U.S. District Court for the Eastern District of Michigan against National City Corporation, the holding company of National City Bank of the Midwest.

The lawsuit alleges that in 2004 and 2005, Phillip Peake, then a loan officer for the bank, processed at least a dozen loan applications totaling about $7.8 million on property located in mostly AfricanAmerican residential areas. The bank ultimately rejected all of the loans because their locations were in areas "not desirable based upon National City criteria." Each of the twelve loan applications were subsequently processed and accepted by other lending institutions.

Redlining is the illicit practice by banks, mortgage companies and insurance companies that discriminates lending, credit or coverage to a person, place or business, based on geographic location. Redlining is a violation of the Fair Housing Act of 1988, the 19th Century Civil Rights Act, the Equal Credit Opportunity Act and the Community Reinvestment Act of 1977.

"National City Bank's discriminatory practices in the area of real estate lending, have considerable negative economic impact on a community and its ability to remain viable," said David Rose, an attorney representing the plaintiffs.

Officials at National City Corporation did not return phone calls to address the complaint.

~~~~~~~~

By Glenn Townes, Special to the AmNews