HOUSTON (CN) – The NAACP claims in a federal class action that Capital One Bank is closing branches in minority neighborhoods because it prefers white customers, while featuring black celebrities in commercials as cover for its discrimination.
Established in 1994 and headquartered in McLean, Va., Capital One Bank says it has more than 70 million account holders. Its 2017 revenue was $27.2 billion, a 7 percent increase from 2016.
NBA Hall of Famer Charles Barkley, actor Samuel L. Jackson and director Spike Lee regularly appear in its ubiquitous “What in your Wallet?” bank-card TV advertisements.
The NAACP claims in its lawsuit that Capital One’s use of these prominent black celebrities for its ads is a “devious ploy” to hide the bank’s discriminatory “redlining” campaign in which it is allegedly closing banks in black and Latino communities to deny them access to mortgages, car loans and credit lines.
The Houston branches of the NAACP and the League of United Latin American Citizens and Laurie Vignaud, a black former Capital One employee, filed a class action against the bank on Tuesday in Houston federal court.
Lead class attorney Benjamin Hall said in a phone interview Wednesday that Capital One has closed 30 to 34 branches since 2010 in minority communities in South Texas and Louisiana. Capital One had 731 U.S. branches as of Sept. 30, 2017, according to the Federal Reserve.
Hall, a longtime NAACP member who ran for Houston mayor in 2015, said he learned about Capital One’s alleged discrimination after members of Congress told him to investigate banking industry trends.
“When I looked into it I saw at least a pattern of closures. I did not know why it was occurring. And then I searched around for witnesses and found several. Ms. Vignaud is the one that is most brave to come forward and say, ‘Yes I know what is going on, and I am willing to share that information with you,’” Hall said.
Vignaud worked for Capital One for nearly 20 years and was a senior director of its South Central U.S. region for more than a decade, according to the complaint.
She says in the lawsuit that one of her main jobs was to ensure the bank’s compliance with the Community Reinvestment Act, which Congress passed in 1977 to protect poor people of color from redlining, a practice in which banks purposely avoid opening branches in minority communities.
Hall said Congress specifically crafted that law to stop banks from discriminating against racial minorities, and that black and Latino customers should not have to travel to Capital One’s branches in white neighborhoods.
“That’s just like saying we are going to put all the good grocery stores in the white neighborhood and you negros can go over there and buy if you want to,” Hall said. “That’s not the law. You don’t have the right to congregate good banking facilities over in white neighborhoods and tell the black and brown customers, just go into the white neighborhoods to bank.”
According to the lawsuit, Vignaud complained to Capital One higher-ups about the bank closures and, aware they were violating the law, they told her and other managers to keep tabs on the social media accounts of civil rights groups like the NAACP, LULAC, Black Lives Matter and the Urban League, fearing a backlash against its redlining campaign.
“They also had people attend events where there might be black activists to make sure that they were not criticizing the bank,” Hall said.
Vignaud, who is also an NAACP member, says Capital One fired her last September for speaking out against the discrimination.
Hall said that Capital One encourages African-Americans, through its ad campaigns, to use its debit cards.
“That is really a devious plan because black customers should be able to walk into a bank and get credit applications and mortgage applications, as opposed to just having an ATM card where they go to an ATM machine to take out money that they have already put in,” he said.
Hall said he places no blame on the black celebrities Capital One hires for its ads.
“I don’t think Samuel L. Jackson or Spike Lee know anything about this, but they are unwittingly being used,” he said.
The NAACP and LULAC seek class certification as well as compensatory and punitive damages for alleged violations of the Fair Housing Act, the Equal Credit Opportunity Act, the Community Reinvestment Act, and the Civil Rights Act.
Vignaud seeks more than $1 million in damages for claims of First Amendment violations and racial discrimination.
Capital One said in a statement it is not discriminating, but being “thoughtful” about where to locate its branches.
“The allegations in this case are baseless and we will vigorously defend ourselves in this matter. Capital One has been thoughtful about its branch strategy in order to provide the right physical presence in all of our markets that considers the needs of our customers, the communities we serve, and Capital One,” it said.