Boston, MA 06/09/2014 (wallstreetpr) – Providence, R.I. on June 5, 2014 filed a federal complaint against Banco Santander, S.A. (ADR) (NYSE:SAN) U.S. unit in the alleged case of discriminatory lending methods undertaken by the Spanish bank. It is important to note that the bank had gained a grip in the mortgage market of the city back in the year 2009 when it bought the remaining portion of Sovereign Bank of Philadelphia.
Accusations of the Providence
The city of Providence, R.I., accused Banco Santander, S.A. (ADR) (NYSE:SAN) of reducing the lending in the minority neighbourhood of Providence. The city, while filing the lawsuit in U.S. District Court for the District of Rhode Island, alleged that the Spanish bank increased its lending activities in most of the white neighborhoods . Providence, R.I. accused that the bank while doing such discriminatory lending practices, has violated Housing Act and the Equal Credit Opportunity Act.
In the lawsuit, it was declared that the mortgage originations and applications were declined in minority neighbourhoods and that the decline was because of redlining, which is a major hindrance to participation of minority community in housing market recovery.
Statement from the Mayor of Providence
The Mayor of Providence, R.I., Angel Taveras said that the Banco Santander, S.A. (ADR) (NYSE:SAN)’s practices were violating the fair lending laws and that it hurt the Providence families. The Mayor, in a statement, said that there were various borrowers in Providence’s minority neighbourhood who were eligible and qualified for the prime loans, but the Bank has written off their names.
Other Banks also accused in the U.S. Cities
Banco Santander, S.A. (ADR) (NYSE:SAN), it must be noted, is not the only bank to be accused by the U.S. cities. Earlier on June 4, 2014, a federal judge of Los Angeles filed a lawsuit against the Wells Fargo & Co. for inappropriate lending practices. Wells Fargo & Co., in this context, had said that the bank was prepared to defend the record as a responsible lender and that there were long-standing efforts of the bank in LA with the customers.
