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According to Market Intelligence, April 2023

Ohio-based banks reach settlement with DOJ over discrimination claims

Ohio institutions Cincinnati-based Union Savings Bank and West Chester-based Guardian Savings Bank FSB agreed to a settlement with the U.S. Department of Justice over allegations of discriminatory lending against African-American borrowers predominantly around Cincinnati, Columbus, Dayton in Ohio, and Indianapolis.

The settlement, which is part of a consent order subject to court approval, stipulates that Union Savings will open two full-service branches and Guardian Savings will open one loan production office to serve the residents of African-American neighborhoods. The two banks will also make at least a $9 million investment into majority African-American neighborhoods in the Cincinnati, Columbus, Dayton and Indianapolis metropolitan areas.

The investment includes a $7 million in a loan subsidy fund to increase the amount of credit that extend to residents of majority African-American census tracts. The remaining $2 million will go to advertising, outreach, financial education and community partnership efforts. Furthermore, the banks have been directed to implement stronger internal controls to prevent future incidents.

The complaint against the two banks alleges that they committed violations of the Fair Housing Act and the Equal Credit Opportunity Act from at least 2010 through 2014 by redlining, or refusing to lend in neighborhoods based on demographics such as race.

The consent order included a statement on the matter by the banks: "While the Banks strongly deny the violations of law alleged by the United States, they do agree that access to lending and financial education create opportunities that enhance the financial futures of individuals, families and communities. Thus, the Banks have voluntarily entered into this agreed-upon Consent Order, which will avoid the costs and burdens of litigation and allow the Banks to further focus their efforts on building strong communities."

Guardian Savings Bank is a unit of Guardian Bancorp Inc.