DOJ And American Bank Of Oklahoma Settle Claims Of Redlining

The Justice Department and an Oklahoma bank have agreed to settle claims that the bank used discriminatory lending practices. 

The DOJ says American Bank of Oklahoma engaged in redlining, the illegal practice of refusing or limiting loans to people because of where they live. 

The Department of Justice says American Bank of Oklahoma, which is headquartered in Collinsville, failed to offer its banking services to majority black and Hispanic neighborhoods in Tulsa.

The DOJ's complaint filed in Federal Court Monday says that from at least 2017 to 2021, American Bank of Oklahoma's service area left out neighborhoods in north and east Tulsa. They provided this map that shows areas were ignored, including the historic Greenwood Neighborhood.  

That's where Francetta Mays and Angela Chambers started The Greenwood Beat, a radio show for voicing the concerns of their community. Francetta Mays says redlining is nothing new for Black Wall St.

"It's been an issue since the beginning, it's been as issue since 1921," says Mays.

Mays is also the President of the Tulsa NAACP Chapter and is glad someone is doing something to stop illegal banking practices. 

"I'm grateful that at bare minimum we were able to pull the covers off of it and someone's able to hold now accountable the financial lending institutions," says Mays.

The DOJ complaint also says that employees of the bank sent work emails with racist content. 

In a statement, American Bank of Oklahoma denies the allegations. But in a consent order, which is subject to court approval, the bank has agreed to invest more than 1 million dollars to increase credit opportunities in minority neighborhoods as well as open a community-oriented loan office in the historically black areas of Tulsa. Angela Chambers says this is a good first step. 

"We have a lot of educating to do, educating our community on how banks works, how they should work, what's going on, what to do, we're focusing on home ownership," says Chambers. 

Statement from Department of Justice 

Justice Department Secures Agreement with American Bank of Oklahoma to Resolve Lending Discrimination Claims

Settlement Provides Over $1 Million to Ensure Equal Home Loan Opportunities in Neighborhoods of Color in North and East Tulsa

TULSA, Okla. - The Justice Department announced today a settlement agreement to resolve allegations that American Bank of Oklahoma engaged in a pattern or practice of lending discrimination by redlining in Tulsa, Oklahoma. The affected area includes the historically Black neighborhoods that were the site of the 1921 Tulsa Race Massacre.

This resolution is part of the department’s nationwide Combating Redlining Initiative launched by Attorney General Merrick B. Garland in October 2021.

Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of the residents in those communities. 

“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 Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “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 opportunities for building generational wealth while focusing on neighborhoods that bear the scars of the Tulsa Race Massacre. The Justice Department will continue to combat redlining and ensure equal access to credit for all Americans.”

“American Bank of Oklahoma engaged in the illegal practice of redlining and failed to serve the diverse members of our Tulsa community as they attempted to purchase homes,” said U.S. Attorney Clinton Johnson for the Northern District of Oklahoma. “These practices are often hard to identify and prosecute and I want to thank the Department of Justice’s Civil Rights Division for taking measures to correct these abhorrent business practices.”

The complaint filed in federal court today alleges that, from 2017 through at least 2021, American Bank of Oklahoma failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods in the Tulsa metropolitan area. Specifically, the department alleges that all American Bank of Oklahoma’s branches and loan production offices were located in majority-white neighborhoods, that the bank designated a service area that excluded all majority-Black and Hispanic-census tracts in the metropolitan area, and that the bank failed to appropriately monitor and address fair lending risk. 

As a result, the bank’s loan officers did not serve the credit needs of Black and Hispanic neighborhoods in and around Tulsa, and the bank’s actions reinforced and perpetuated segregated housing patterns because of race, color, or national origin. The complaint also alleges that bank employees, including executives and loan officers, sent and received emails on their work email accounts containing racial slurs and racist content.

Under the proposed consent order, which is subject to court approval, American Bank of Oklahoma has agreed to invest over $1.15 million to increase credit opportunities in neighborhoods of color in the Tulsa metropolitan area. The bank will invest at least $950,000 in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods in the Tulsa area; $100,000 for advertising, outreach, and consumer education; and $100,000 for development of community partnerships to provide services that increase access to residential mortgage credit. The bank will also open a new community-oriented loan production office in the historically Black area of Tulsa; ensure at least two mortgage loan officers are dedicated to serving majority-Black and Hispanic neighborhoods in and around Tulsa; host at least six consumer financial education seminars per year, with translation and interpretation services in Spanish; and will employ a full-time director of community lending, who will oversee the continued development of lending in neighborhoods of color in the Tulsa area.

The department opened its investigation into American Bank of Oklahoma’s lending practices after receiving a referral from the Federal Deposit Insurance Corporation. The bank cooperated with the department’s investigation and worked with the department to resolve these allegations.

In October 2021, the department launched its Combating Redlining Initiative as a coordinated enforcement effort to address this persistent form of discrimination against communities of color. Since the initiative was launched, the department has announced eight redlining cases and settlements and secured $89 million in relief for communities of color that have been victims of lending discrimination across the country.

More information about the department’s fair lending enforcement can be found at www.justice.gov/crt/fair-lending-program. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.

Statement from American Bank of Oklahoma 

AMERICAN BANK OF OKLAHOMA ANNOUNCES SETTLEMENT OF CLAIM MADE BY DEPARTMENT OF JUSTICE

COLLINSVILLE, Okla. (Aug. 28, 2023) ––

American Bank of Oklahoma (“ABOK” or the “Bank”) announced today that it entered into a settlement agreement with the U.S. Department of Justice to resolve the government’s claim that the Bank had not adequately served the residential mortgage lending needs of residents in certain minority neighborhoods in the Tulsa market. ABOK denies the allegations but has agreed to resolve the matter to avoid the cost and distraction of protracted litigation. 

ABOK is a community bank with full-service branches in Collinsville, Disney, Muskogee, Ramona and Skiatook. ABOK Chairman and CEO Joe Landon, along with others, founded the Bank in 1998 with the mission of serving the banking and lending needs of residents and businesses in small rural communities in eastern Oklahoma. “I have been in banking for more than 50 years and seen the positive impact banks can have on families and businesses. When we founded this Bank 25 years ago, we had one goal in mind – helping members of the communities we serve achieve their financial and personal goals,” said Mr. Landon. He added, “We go the extra mile for our customers, and that is what sets us apart from other banks.”

As Oklahomans, we carry a profound sense of sorrow for the tragic events of the Tulsa Race Massacre over a century ago. 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. ABOK stands as a small community bank, with $383 million in assets and constrained resources, endeavoring to maintain competitiveness within the City of Tulsa. Despite our limitations, we remain resolute in our commitment to expand lending initiatives and foster financial inclusivity for the residents of Tulsa.

ABOK intends to expand its current suite of deposit and lending products offered in Tulsa through its American Discovery™ program by adding mortgage purchase and refinance products. The Bank will also be exploring ways to deepen and broaden its existing relationships with community partners in Tulsa, leveraging the new loan production office it intends to open. Financial education will be a key component of its new initiatives. ABOK has been an active supporter of schools in its communities and is a proud sponsor of financial education courses for students in north Tulsa public schools.

“We are excited about the opportunity to apply our community banking model in north and northeast Tulsa and look forward to expanding ways we can help members of the communities with their banking and lending needs,” said Mr. Landon. 

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American Bank of Oklahoma

Established in 1998, American Bank of Oklahoma operates as a local, full-service bank, making decisions at the community level. Its mission focuses on assisting residents in establishing homes, saving for the future and fostering local business growth. With insurance, group benefits and mortgage lending services, it is a cornerstone in eastern Oklahoma, managing over $383 million in assets among six branches.