The City of Providence, R.I., has dropped its lawsuit against Santander Bank, over charges the bank deliberately failed to provide mortgages in minority communities.

The city in May accused the $77 billion-asset bank of scaling back lending in African-American and Latino neighborhoods while, at the same time, increasing originations in predominantly white neighborhoods.

In a federal complaint filed in the District of Rhode Island, the City of Providence said that the bank began redlining after its 2009 acquisition by the Spanish banking giant Banco Santander.

Meanwhile, Santander agreed on Monday to provide $1.3 million in grants to support low-income neighborhoods in Providence. The grants are "the first step in a longer relationship" to strengthen minority communities, a city spokeswoman said in an email Wednesday.

News of the lawsuit dismissal was reported by the Providence Journal.

A spokesman for Santander declined to comment.

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