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Evans, AG office reach agreement over ‘redlining’ lawsuit

The state Attorney General’s Office has reached a settlement with Evans Bancorp that it says will require the bank to end discriminatory “redlining” in Buffalo.

The agreement ends a lawsuit state Attorney General Eric T. Schneiderman filed in September 2014, accusing the Hamburg-based bank of denying access to mortgage loans to borrowers in predominantly African-American neighborhoods of Buffalo because of their racial composition. The bank denied engaging in redlining, and set aside $1 million for the case.

The settlement requires Evans to revise its lending area to include East Side neighborhoods and other areas that were previously excluded from the bank’s lending area. Evans will also create an $825,000 settlement fund to promote home ownership and affordable housing in Buffalo.

“It is essential that all New Yorkers, regardless of the color of their skin or the racial makeup of their neighborhoods, be afforded equal access to our banking systems – and the basic benefits of obtaining a mortgage,” Schneiderman said in a statement.

The suit was spurred by a trade area map created by the bank for federal regulators showing where the bank solicited business. In announcing the lawsuit last year, Schneiderman called Evans’ map “classic redlining,” with boundaries that excluded the East Side of Buffalo and the west side of Cheektowaga. David J. Nasca, Evans’ president and CEO, said the map was not drawn to exclude customers, but rather to indicate where the bank would most likely attract deposits, based on the locations of its two branches in the city.

Evans Bank issued a statement following the settlement.

“Throughout the course of this matter, no specific incidents were ever claimed, described or identified and as such, we believe the underlying lawsuit was based upon unsubstantiated information and Evans would have eventually prevailed in court,” the bank said.

“Regardless, Evans believes that this settlement is in the best interests of the community and our shareholders to end this unfortunate matter.”

The $825,000 Evans settlement fund consists of four components.

The largest piece - $475,000 – is a grant to create a Housing Opportunity Fund. It will fund programs managed by the city’s Office of Strategic Planning that encourage home ownership and develop and restore affordable housing in Buffalo.

Evans will also be required to spend $200,000 on advertising and marketing to designed to reach potential applicants and residents of the East Side and other neighborhoods that were excluded from the bank’s trade area.

Additionally, Evans will spend $100,000 on grants, fee waivers and other subsidies, as part of a special financing program designed to increase lending activity on the East Side and other areas that were excluded.

The other $50,000 will go to the state for costs and fees.

Schneiderman said Evans will revise its loan policy to eliminate any minimum mortgage amount, provide fair lending training to employees and agents and report information to the Attorney General’s Office to ensure compliance.