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New York's Evans Bank accused of denying loans to African-Americans

NEW YORK (Reuters) - New York state's attorney general on Tuesday accused regional bank Evans Bancorp of illegally discriminating against African-Americans in Buffalo by denying them mortgages.

According to the lawsuit, Evans Bank deliberately disqualified African-Americans from its mortgage products regardless of their creditworthiness, a practice known as redlining.

Attorney General Eric Schneiderman said the bank produced maps outlining its "Trade Area" that excluded all of the predominantly African-American neighborhoods on the eastern side of Buffalo, one of the most racially segregated cities in the United States.

Of the 1,114 residential mortgage applications received by the bank from the Buffalo area between 2009 and 2012, only four were from applicants who described themselves as African-American, the lawsuit said, a far lower rate than any other bank with an office in the city.

David Nasca, the bank's president and chief executive, denied the allegations in a statement distributed by a public relations firm.

"Despite our best efforts over the last several months to resolve this matter with the Attorney General, a resolution unfortunately could not be reached," the statement said. "We remain confident that our residential lending practices meet all applicable laws and regulations."

The lawsuit was the first to come out of a broader ongoing investigation by Schneiderman's office of redlining by New York banks in the wake of the financial collapse of 2008.

The lawsuit accuses Evans Bank of using redlining practices in violation of the Fair Housing Act, a federal law, since at least 2009. It calls for a jury trial, and for the court to order the bank to change its practices and pay a fine.

The bank was founded in 1920, according to its website, and has its headquarters in Hamburg, a town outside of Buffalo.

(Reporting by Jonathan Allen; Editing by Cynthia Osterman and Dan Grebler)

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