PROVIDENCE, R.I. (WPRI) — Rhode Island General Treasurer James Diossa announced Thursday he will evaluate the banking relationship and the state’s business with Washington Trust Company.
Washington Trust, the oldest community bank in the nation, agreed to pay $9 million to resolve allegations it engaged in lending discrimination by redlining majority-Black and Hispanic neighborhoods in Rhode Island.
The complaint alleges Washington Trust didn’t provide mortgage lending services to majority-Black and Hispanic neighborhoods in the state from 2016 through at least 2021.
“Washington Trust has been a valued banking partner to the state for decades. However, the allegations presented by the U.S. Attorney’s Office for the District of Rhode Island and the U.S. Department of Justice’s Civil Rights Division are serious and disheartening,” Diossa said.
“I was very disappointed to learn of this investigation and the settlement via the news yesterday. As the oldest community bank in the nation, Washington Trust must be held to a high standard,” he continued.
(Story continues below.)
The complaint further alleges that even when the bank generated loan applications from majority-Black and Hispanic neighborhoods, the applications themselves were disproportionately white.
During that time, the complaint said other banks got nearly four times as many loan applications each year in majority-Black and Hispanic neighborhoods in the state.
According to a study by the Urban Institute, while 70% of white Rhode Islanders own their own home, only 38% of Black and 32% of Hispanic Rhode Islanders are homeowners.
“As General Treasurer, it is my duty to protect the state’s assets, strengthen the state’s financial position, and encourage financial growth for all our residents,” Diossa said.
“When Rhode Island families in any zip code are denied access to fair lending opportunities, it becomes much harder for them to achieve financial success and build generational wealth—we need to be creating homeownership opportunities for all Rhode Islanders, not restricting them,” he continued.
Washington Trust told 12 News they believe they’ve been fully compliant with fair lending laws, citing corporate initiatives and multi-lingual, minority outreach staff as part of their commitment to all communities.