Dive Brief:

• American Bank of Oklahoma has agreed to pay more than $1.15 million to settle an investigation into allegations the Collinsville, Oklahoma-based lender provided inadequate mortgage lending services to majority-Black and Hispanic neighborhoods in the Tulsa metropolitan area from 2017 to at least 2021, the Justice Department said Monday.
• All of ABOK’s branches and loan production offices were located in majority-white neighborhoods, and the bank designated a service area that excluded all majority-Black and Hispanic-census tracts in the metropolitan area, the Justice Department alleged, adding that the bank failed to appropriately monitor and address fair lending risk. Those actions “reinforced and perpetuated segregated housing patterns,” the DOJ said.
• ABOK agreed to open a loan production office in a historically Black area of Tulsa, ensure at least two mortgage loan officers are serving majority-Black and Hispanic neighborhoods, and hold at least six consumer financial education seminars per year, with translation and interpretation services in Spanish. The bank also will designate a full-time director of community lending, who will oversee development of lending in the Tulsa area’s neighborhoods of color, the DOJ said.

Dive Insight:

“Providing equal access to credit is essential in every community, but the painful history of Tulsa makes this agreement particularly poignant because the redlined areas include historically Black neighborhoods that have endured the legacy of racial violence and the continuing effects of segregation and discrimination,” said Kristen Clarke, assistant attorney general in the DOJ’s civil rights division.

In a statement Monday, the bank denied the DOJ allegations but said the settlement would “avoid the cost and distraction of protracted litigation.”

ABOK also bristled at the DOJ’s call-out to the 1921 Tulsa massacre, in which dozens of Black people were killed and 35 square blocks of the Greenwood district, known as the “Black Wall Street,” were burned.

“As Oklahomans, we carry a profound sense of sorrow for the tragic events of the Tulsa Race Massacre over a century ago,” the bank said Monday. “It is with deep concern that we note the Justice Department’s decision to reference this distressing historical event in its complaint against our bank, established a mere 25 years ago.”

The DOJ complaint also alleges that ABOK employees, including executives and loan officers, sent and received emails containing racial slurs and racist content on their work email accounts.

The ABOK settlement marks the eighth redlining-related resolution the DOJ has reached since launching a coordinated effort in late 2021 to fight lending discrimination alongside the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. The initiative has yielded $89 million in relief.

ABOK agreed to invest at least $950,000 in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods in the Tulsa area. The bank will also designate $100,000 for advertising, outreach and consumer education and $100,000 for development of community partnerships meant to boost access to residential mortgage credit.

“ABOK stands as a small community bank, with $383 million in assets and constrained resources, endeavoring to maintain competitiveness within the City of Tulsa,” the bank said in its statement. “Despite our limitations, we remain resolute in our commitment to expand lending initiatives and foster financial inclusivity for the residents of Tulsa.”

The DOJ opened its investigation into ABOK upon a referral from the Federal Deposit Insurance Corp.