New York financial regulators filed a lawsuit Tuesday against Evans Bank and Evans Bancorp Inc. (collectively known as Evans), alleging the regional bank denied access to mortgage loans to predominately African-American neighborhoods in Buffalo, N.Y. because of the racial mix of those areas.

The lawsuit charges Evans with intentionally excluding the neighborhoods from its lending area; developing mortgage products that it made unavailable to these neighborhoods - notwithstanding the creditworthiness of the applicants; and refusing to solicit customers, market mortgages or provide banking options in those neighborhoods. The alleged illegal lending has taken place since 2009.

New York Attorney General Eric Schneiderman's office filed the lawsuit in the U.S. District Court for the Western District of New York.

The lawsuit alleges that Evans created a map defining its lending area that included most of Buffalo but not the largely African-American neighborhoods on the city's Eastside.  

By redlining those neighborhoods, which are home to more than 85,000 people, Evans excluded more than 75% of Buffalo’s African-American population from the marketing and sales of its mortgage products and services, according to the lawsuit. 

The lawsuit is part of a wider investigation by the state's Civil Rights Bureau into mortgage redlining by banks operating in New York state. It was prompted by concerns that banks had stopped lending to minority communities in the wake of the mortgage crisis and financial collapse of 2008.

According to U.S. Census Data from 2005 to 2009, New York ranks as the most highly segregated state. The Buffalo metro area was among the most highly segregated large metro areas in the nation in 1980, 1990, 2000, and as recently as 2010, when it was the sixth most highly segregated large metro area.

The lawsuit alleges that a statistical analysis shows the racially discriminatory effects of the bank’s practices, demonstrating that Evans failed to draw mortgage applications from and make mortgage loans to African-American borrowers and Eastside residents at the rates expected based on the performance of comparable banks operating in the same area during the same period as Evans.

The complaint alleges, for example, that Evans received 1,114 residential mortgage applications in the Buffalo metro area from 2009 to 2012, only four of which were reported as from African-American applicants.  Similarly, of these 1,114 residential mortgage applications, the lawsuit alleges that only eight came from the Eastside neighborhoods, only one of which was reported as from an African-American applicant. 

"Redlining is illegal, discriminatory and must be made a thing of the past, once and for all," Schneiderman said. "It is crucial that all New Yorkers, regardless of the color of their skin or the racial composition of their neighborhood, be afforded an equal opportunity to obtain credit. This is especially true as families continue to recover from the mortgage crisis."

The lawsuit specifically alleges violations of the Fair Housing Act and the New York State Human Rights Law.

The term "redlining" dates to the 1930s, when the Federal Housing Administration used red ink to designate areas that the housing agency considered too risky to receive loans. 

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