Fair Housing Center of Central Indiana v. Old National Bank

On October 6, 2021, Relman Colfax filed a lawsuit in Indiana federal court alleging that Old National Bank engaged in lending discrimination in Indianapolis in violation of the Fair Housing Act.  The Complaint alleges that Old National engages in “redlining,” which is the practice of not making mortgage loans to Black borrowers and those living in Black neighborhoods. The lawsuit was filed on behalf of the Fair Housing Center of Central Indiana, a private fair housing organization headquartered in Indianapolis

Old National is based in Evansville, Indiana with 166 branches in Indiana, Kentucky, Illinois, Michigan, Wisconsin, and Minnesota.  Its application to merge with First Midwest Bank is currently pending before the Federal Reserve Bank of St. Louis.   

The suit claims that Old National deprives Black residents of mortgage credit and deliberately seeks to limit its residential lending business to predominantly white areas and white customers.  In 2019-2020, Old National made over 2250 loans in the Indianapolis Metropolitan Statistical Area (MSA).  Only 37 were to Black borrowers, and only 23 of those were in Marion County (nearly coextensive with the city of Indianapolis) where there are over 263,000 Black residents. The bank made 91.4% of its loans in the MSA to white borrowers and only 1.78% to Black borrowers.

The complaint also alleged that, over the past ten years, Old National substantially reduced the number of its branches that serve Black neighborhoods. In addition, none of Old National’s Mortgage Loan Officers are located in branches in Black neighborhoods, actively discouraging prospective Black customers from applying for loans or banking with Old National.

On December 17, 2021, the parties settled the litigation. Old National Bank and the FHCCI agreed to a major initiative to increase mortgage lending to Black borrowers and majority-Black neighborhoods in Indianapolis. The initiative will include opening two loan production offices that will be converted into branch offices in majority-Black census tracts, a $1.1 million loan subsidy fund, an agreement to originate $20 million in home loans and $7.5 million in loans to support affordable apartments, and substantial support for community development corporations (CDCs) and community organizations based and working in Indianapolis’ Black neighborhoods.

The Relman Colfax team consisted of John Relman, Glenn Schlactus, Sara Pratt, and Alexa Milton, with paralegal support from Sonali Durham and Mariana Boully Perez. Our co-counsel are Russell Cate and Matthew Keyes of RileyCate, LLC of Fishers, Indiana.