The DOJ reached a $9 million settlement with Washington Trust Company, the oldest community bank in the United States, in October 2023 for redlining majority-Black and Hispanic neighborhoods in Rhode Island from 2016 to 2021, requiring $7 million in loan subsidies and opening at least two branches in minority communities.

Washington Trust Company — DOJ $9 Million Redlining Settlement, Rhode Island (2023)

Outcome: The Department of Justice secured a $9 million settlement and consent order with Washington Trust Company — the oldest community bank in the United States, founded in 1800 — in October 2023 for redlining majority-Black and Hispanic neighborhoods across Rhode Island from 2016 to 2021, requiring $7 million in a loan subsidy fund and the opening of at least two new branches in minority communities.

Washington Trust Company, headquartered in Westerly, Rhode Island, holds the distinction of being the oldest community bank in the United States, founded in 1800. Despite this historic community banking mission, the DOJ investigation found that from at least 2016 through 2021, Washington Trust had systemically avoided seeking or originating mortgage loans in majority-Black and Hispanic neighborhoods across Rhode Island. The bank's geographic lending patterns were particularly stark: during this six-year period, other banks received nearly four times as many loan applications per year from majority-Black and Hispanic neighborhoods as Washington Trust did.

The investigation found that Washington Trust concentrated its mortgage loan officers exclusively in majority-white areas, making those officers — the primary source of lending applications — inaccessible to minority communities. The bank had no loan officer presence, no marketing outreach, and no meaningful mortgage lending activity directed toward minority neighborhoods despite operating in a state where minority communities represent a significant portion of the population.

The October 2023 settlement required Washington Trust to commit a minimum of $7 million to a loan subsidy fund for mortgage, home improvement, and refinancing loans in majority-Black and Hispanic neighborhoods. The bank was required to open at least two full-service branches in those communities (one likely in Providence's Olneyville neighborhood), allocate $1 million for advertising, outreach, financial education, and credit counseling, and invest $1 million in community partnerships to support residential mortgage credit access. Washington Trust denied the allegations but entered the settlement to avoid litigation cost and distraction.

Primary Source: DOJ Press Release — $9 Million Agreement with Washington Trust Company