American Bank of Oklahoma has agreed to settle redlining charges brought by the Department of Justice and will make restitution by lending $1 million in Black and Hispanic neighborhoods in Tulsa.
Executives of the Collinsville, Oklahoma, bank denied wrongdoing. In a press release late Monday, they said they entered into the settlement "to avoid the cost and distraction of protracted litigation."
Chief Executive Joe Landon criticized the DOJ for disclosing racially charged emails the government claims American Bank employees forwarded to each other, and for mentioning the 1921 Tulsa Race Massacre in its press release announcing the settlement, as well as in the complaint against American Bank.
Both consent order and complaint were filed Monday in U.S. District Court for the Northern District of Oklahoma in Tulsa.
According to the DOJ's 24-page complaint, American Bank employees circulated emails that contained racial slurs, including use of the "N-word" in its entirety. Other emails exchanged among co-workers at the bank touched on sensitive topics like immigration, gang violence and the supposed decline of Detroit, Michigan.
But in an interview Monday, Landon said "the majority" of the emails DOJ referenced came from outside the bank "and I have no control over that."
"I get 100 to 200 emails a day. I don't read them all," Landon added.
In a subsequent statement, American Bank claimed that "many of the quotes were taken from unsolicited communications forwarded or written by third parties, and others were taken out of context."
"Any racially or ethnically insensitive sentiments included in these emails do not reflect our culture or values," American Bank added in the statement.
The DOJ also noted some of the neighborhoods American Bank allegedly redlined were victimized in the 1921 Race Massacre, where white rioters destroyed the city's largely African American Greenwood District, killing as many as 300 people, according to some accounts.
"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," Assistant Attorney General for Civil Rights Kristen Clarke said Monday in a press release.
The complaint is more explicit on this point, stating the "area that [American Bank] redlined includes the historically Black neighborhoods in Tulsa that were the site of the 1921 Tulsa Race Massacre."
Landon, for his part, said he founded American Bank in 1998, nearly eight decades after the attack on Greenwood. He voiced his concern that mentioning the Race Massacre might dampen customer interest in the lending program American Bank has agreed to undertake in the settlement.
"We were kind of shocked that they brought that up,' Landon said Tuesday in an interview. "We didn't see the relevance. We're moving into a new community. We're going to do our best. I think we can be successful there. ... I sure don't see it as helping."
Andrea Mitchell, American Bank's attorney, called the DOJ's references to the 1921 Race Massacre "politically charged and entirely irrelevant."
"Seeking to link bank conduct to this event over 100 years ago entirely undermines the remedial purpose of a consent agreement, which is to create a framework for banks to develop trust with minority communities to be able to better serve those communities with mortgage credit and other banking services," Mitchell, managing partner at the law firm Mitchell Sandler in Washington, said Tuesday in a statement.
A DOJ spokesperson declined to comment on its references to the 1921 Race Massacre.
The DOJ claimed the $383 million-asset American Bank steered clear of minority neighborhoods in the Tulsa metropolitan statistical area, confining its operations to majority white communities. "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," Clinton Johnson, U.S. attorney for the Northern District of Oklahoma, said in DOJ's press release.
The DOJ alleged that American Bank's federal regulator, the Federal Deposit Insurance Corp., warned about fair-lending risk and recommended specific measures to address the issue. None of the recommendations were implemented and, as a result, American Bank made far fewer mortgage loans in Black and Hispanic neighborhoods compared with similarly situated lenders, according to the DOJ.
But Landon said American Bank's business model has been to focus on small towns in eastern Oklahoma, rather than deliberately avoiding lending to mortgage borrowers in Tulsa's minority neighborhoods. "I'm from a small community," Landon said Tuesday. "I've always lived in a small community. I love small towns. That's one of the reasons we chose where we are. It had nothing to do with race."
