U.S. Attorney General Merrick Garland announced the settlement in Jacksonville on Thursday, Oct. 19, 2023. [Andrew Pantazi/The Tributary]

Ameris Bank will settle a federal lawsuit, paying $9 million after the federal government accused the lender of discriminating against Black-majority neighborhoods in Jacksonville.

U.S. Attorney General Merrick Garland announced the settlement Thursday in Jacksonville, two years after he launched the Justice Department’s Combating Redlining Initiative, an effort to go after discriminatory lending practices.

Garland said the U.S. government has secured 10 consent orders in that time, and $100 million has been committed to communities harmed by banks and other lending institutions.

“Redlining is not just a relic of the past,” Garland said Thursday, referring to a century-old practice where the federal government identified Black-majority neighborhoods as riskier and less deserving of home loans. “Indeed, some of the neighborhoods that we allege Ameris redlined are some of the same neighborhoods that federal agencies originally redlined beginning in the 1930s.”

Ameris denied the allegations even though it agreed to settle the case, writing in the proposed consent order, “The Bank maintains that it was in compliance with applicable law at all times, but seeks to resolve this matter in order to avoid prolonged litigation.”

In a statement, Ameris CEO Palmer Proctor said, “We strongly disagree with any suggestion that we have engaged in discriminatory conduct and are confident in our efforts to provide equal access to affordable mortgage products in the Jacksonville community and all the markets we serve.”

Jacksonville Mayor Donna Deegan issued a statement touting Garland and the Justice Department for “making investigations into redlining a priority.” She said she hopes the Ameris settlement “will provide some relief for families who were denied the opportunity to obtain access to home ownership.”

“The scourge of redlining has negatively impacted Jacksonville communities of color for far too long,” Deegan stated.

The consent order requires Ameris to invest $7.5 million in a loan subsidy fund that residents of Black-majority and Hispanic-majority census tracts can use for down payments, to lower their interest rates or to make home improvements.

The bank must also spend $900,000 in outreach to residents of those neighborhoods, and to invest $600,000 to develop community partnerships to increase access to residential mortgages, financial education and foreclosure prevention.

At least three of the bank’s mortgage loan officers will be dedicated to serving Black- and Hispanic-majority neighborhoods, and the bank must hire a director of community lending to oversee its lending to those neighborhoods.

A court must approve the settlement.

The Justice Department notified Ameris of the investigation in January 2022.

In one exhibit of its federal complaint, the U.S. Justice Department found Ameris Bank had zero loan applications from certain majority-Black census tracts throughout a six-year period. [Federal complaint]

Ameris didn’t receive a loan application in one-third of the area’s Black- and Hispanic-majority census tracts, according to the lawsuit. Of the loans the bank gave in the Urban Core, only two were made to Black borrowers and none were made to Hispanic borrowers.

The department found that at one point, Ameris sent 22,000 mailers announcing free checking services that the bank said were targeted to low- and moderate-income areas, but not one went to a resident living in a majority-Black or Hispanic neighborhood. The mailers featured exclusively white models.

Ameris also placed all of its billboard marketing in white-majority neighborhoods in 2019 and 2020.

“As early as 2016, Ameris knew that its internal redlining analysis was insufficient to identify and measure redlining risk, but it did not revise its monitoring practices until 2018,” the Justice Department’s lawsuit said.

According to Garland, other lenders produced loan applications to Black- and Hispanic-majority neighborhoods at triple the rate that Ameris did.

Ameris also closed a branch in 2019 that it called one of its best financial performers but that it had also said served larger minority populations than other branches. Today, the closest branch to majority-Black neighborhoods in Jacksonville is its downtown location.

The settlement requires Ameris to open a full-service branch in a Black-majority neighborhood north of the St. Johns River. Ameris currently has 18 branches in the Jacksonville area.

The lawsuit said that Ameris — which has all but two of its Jacksonville-area branches south and east of the St. Johns River, in whiter neighborhoods — was aware the St. Johns River was an impediment to customers. The bank had even said it wasn’t reasonable to think a branch across the river could serve customers on the opposite side of the river.

“When families can’t access credit to achieve homeownership, they lose an opportunity to share in this country’s prosperity,” said Assistant Attorney General Kristen Clarke, head of the Justice Department’s Civil Rights Division.

“It’s important that we’re making this announcement here in the City of Jacksonville, a city that has a long history of civil-rights advocacy,” Clarke said, citing the city’s own James Weldon Johnson, early 20th century protests against segregated street cars, and the 1960s lunch counter sit-ins that led to the racist violence of Ax Handle Saturday. “I hope this announcement builds on that proud tradition and fuels ongoing efforts to ensure full equity for all.”

Jacksonville City Councilman Kevin Carrico, who attended Garland’s announcement, said the settlement should warn other lenders that they must root out any discriminatory practices.

“Everybody that gives home loans in Jacksonville is now going to be on notice that they need to be practicing equity and fairness in these decisions,” Carrico said.

Jim Kowalski, who leads the Jacksonville Area Legal Aid, said his nonprofit has wanted to see this kind of aggressive enforcement of the Fair Housing Act for a while. The Justice Department pursuing this case makes him more willing to dedicate resources toward JALA’s own fair-housing actions against lenders if the government is willing to support.

“The U.S. attorney’s focus on this area, we really hope it helps us bring these larger cases,” Kowalski said.

Redlining originated when the U.S. government steered private lending in the 1930s away from Black-majority neighborhoods, depriving those neighborhoods of needed investment. The Fair Housing Act of 1968 and other civil-rights laws outlawed the practice, but discriminatory lending has never been fully eradicated.

University of North Florida sociology professor David Jaffee said redlining is one of many unfair housing practices he wants to see targeted. Another is “reverse redlining,” where financiers offer home loans to Black homeowners but only do so under disadvantageous terms.

Many long-redlined Jacksonville neighborhoods are also “now being targeted by institutional investors that are buying up single-family homes, converting them to rental properties, and bundling them into investment portfolios for wealthy clients,” Jaffee says. “This also restricts opportunities for homeownership.”

Andrew Pantazi edits and reports for The Tributary. He previously worked as a reporter at The Florida Times-Union where he helped organize the newsroom's union with the NewsGuild-CWA. He is a Jacksonville...

Charlie McGee reports on poverty in Jacksonville. He is a Report for America corps member who previously wrote for the regional paper in California’s High Desert. He has written for outlets including...