The DOJ And Oklahoma Bank Have Reached A Settlement Over Redlining Allegations

By Rayna Reid Rayford ·Updated August 31, 2023

A proposed settlement has been announced by the U.S. Department of Justice (DOJ) and Coinsville-based American Bank of Oklahoma (ABOK) over “claims that the bank discriminated in lending to Black and Hispanic people in the Tulsa area.”

According to the DOJ, the northeastern Oklahoma bank was utilizing redlining policies in Tulsa area majority-Black and Hispanic neighborhoods, which distressingly included the area where the Tulsa Race Massacre occurred in 1921.

Redlining started in the early 1930s and is where “multiple real estate and public sector actors developed and adopted color-coded maps to identify areas’ ‘riskiness’ for housing investment and mortgage lending—[and it] relied explicitly on racist assumptions.”

This practice existed legally for almost forty more years until the Fair Housing Act was enacted in 1968, and was a legal way to bar “groups of people (especially Black households and other households of color) from homeownership opportunities based on race, ethnicity, and religion,” by preventing them from obtaining credit.

The DOJ alleges that the bank was illegally using this practice from 2017 until at least 2021, if not later.

Per the terms of the proposed consent agreement, ABOK will have “to provide $1.15 in credit opportunities in neighborhoods of color in the Tulsa area” pending the approval from the court.

ABOK is also being required to bring on a full-time community lending director, whose job duties will include overseeing lending for Tulsa area neighborhoods of color.

In addition, the DOJ says the bank has been directed to “provide at least two mortgage loan officers for majority-Black and Hispanic neighborhoods, and host at least six consumer financial education seminars annually with translation and interpretation services in Spanish.”

In a statement, Kristen Clarke, Assistant Attorney General of the department’s Civil Rights Division, said “This agreement will help expand investment in Black communities and communities of color in Tulsa and increase opportunities for homeownership and financial stability.”

“Remedial provisions in the agreement will open up opportunities for building generational wealth while focusing on neighborhoods that bear the scars of the Tulsa Race Massacre,” Clarke continued.

Clarke added, “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.”

Despite agreeing to settle, ABOK is not admitting to guilt and is steadfastly denying the allegations, but merely agreed to the proposal in order “to avoid the cost and distraction of lengthy litigation.”

Joe Landon, ABOK’s chief executive, insists they are simply a small community bank and said the bank is planning to open up a “new loan production office in a historically Black area of the city” and will be expanding “its deposit and lending products and add mortgage and refinancing options in Tulsa.”

Landon bemoaned the fact that the DOJ referenced the Tulsa Race Massacre, stating “As Oklahomans, we carry a profound sense of sorrow for the tragic events of the Tulsa Race Massacre over a century ago.”