'Legacy of disinvestment': ATM near Black church ignites debate over Indianapolis bank's lending history

Indianapolis Star

08-07-2025

The National Bank of Indianapolis is consistently one of Marion County's worst-performing lenders to African American borrowers, data shows.
The bank is partnering with a major church in a majority-Black neighborhood to build an ATM and offer financial counseling.
A fair housing organization is calling for a full-service bank branch to demonstrate a stronger long-term commitment.
A new ATM planned in a predominantly Black neighborhood on Indianapolis' northeast side was supposed to be a public relations win for the National Bank of Indianapolis — a symbol of the bank's burgeoning partnership with a major church to lead what they're calling the "East 38th Street Renaissance."
But with new data showing that the bank is consistently one of Marion County's worst-performing lenders to African American homebuyers, a local fair housing organization is calling for the company to open a full-service branch instead of just the ATM to make amends for years of oversight.
The dispute goes far beyond the small standalone ATM that will sit outside of New Direction Church, at 5330 E. 38th St., in the Devington neighborhood. It highlights how historical lending disparities have persisted in a county with a 30-point gap between White and Black homeownership rates, according to the Fair Housing Center of Central Indiana, which shared the data with IndyStar and is pushing for a brick-and-mortar bank branch.
While 66% of White households in Marion County own homes, only 36% of Black households can say the same, according to the FHCCI. That disparity tracks with the nearly 30-point gap between White and Black homeownership rates across the nation — in part the legacy of 20th century housing discrimination such as redlining, a federal policy that denied access to government-backed mortgages for homes in and near African American neighborhoods.
Such policies have left many historically Black communities mired in poverty, FHCCI Executive Director Amy Nelson said.
"It's a legacy of disinvestment in our neighborhoods of color," Nelson said.
But prominent neighborhood leaders and Indianapolis City-County Council members support the bank, saying the ATM is just the tip of the iceberg with regard to its new partnerships in the area.
Working with New Direction Church to reach clients, the bank is offering $200,000 of down-payment assistance to first-time homebuyers, one-on-one financial counseling and weekly seminars on homebuying at the church.
"They are helping to bring added resources and to bring life into this community through revitalization," the Rev. Kenneth Sullivan, the church's lead pastor, said in a December event announcing the partnership.
Douglas Talley, NBOI's executive vice president and chief lending officer, said in an emailed statement that the bank is committed to bringing more financial services to customers in the Devington neighborhood and other areas suffering from disinvestment.
Talley said ATMs that allow withdrawals and deposits, along with regular office hours at community institutions like the nearby church, are a "more effective way for banks to be in the community" amid the decline of traditional bank branches.
Data shows the bank underserves Black borrowers
The parking lot that will host the ATM sits in an area that was labeled "definitely declining" in a redlining map from 1937, meaning it was deemed a riskier place for loans than upscale neighborhoods such as Meridian-Kessler.
Today, nine in 10 Devington residents are people of color and the median income is under $40,000, about two-thirds of the countywide median, according to census data.
Founded in 1993, the National Bank of Indianapolis did not partake in legally sanctioned housing discrimination, which was outlawed in the 1960s. But the bank's recent habits of lending disproportionately to White, upper-income homebuyers and overlooking Black borrowers reflect how past injustice continues to haunt neighborhoods, Nelson said.
From 2018 to 2024, NBOI offered a significantly smaller share of its mortgage loans to Black borrowers than most of Marion County's Top 50 lenders, according to federal data gathered by FHCCI.
The disparity has worsened in recent years. Last year, NBOI was the worst within that group of 50 lenders: fewer than 4% of the bank's home loans went to Black homebuyers in Marion County, where 27% of residents identify as Black or African American. The average share of loans made to Black households among the Top 50 was about 19% — nearly five times higher.
The bank also receives far fewer mortgage applications from Black households than its peers, a sign that its presence is lacking in majority-Black neighborhoods, Nelson said.
Bank's branches confined largely to wealthy areas
NBOI's lending habits are reflected in the locations of its 10 full-service branches, the FHCCI argues.
The bank's palatial white and gold buildings are found mostly in affluent areas on Indianapolis' north side, including one branch in Meridian-Kessler, or in wealthy Hamilton County suburbs. No branch sits in a majority-Black census tract, according to the FHCCI.
Accordingly, the bank serves mainly White borrowers on the north side and in historic neighborhoods near downtown who tend to take out larger loans for pricier homes. In 2024, when 85% of the bank's mortgages in Marion County went to White borrowers, the median income of homebuyers with NBOI loans was about $259,000 — three times larger than the $82,000 median income of the average homebuyer among the Top 50 lenders.
Given NBOI's "extremely poor" record of lending to Black homebuyers, Nelson views the bank's partnership with New Direction Church with skepticism.
The FHCCI pushes for banks like NBOI to open and maintain branches in underserved areas to signal their long-term commitment to work with a diverse set of households, Nelson said.
Although the number of brick-and-mortar bank buildings across the United States has declined over the past decade, lower-income communities and older folks often rely on in-person banking, according to a 2024 report by the Federal Reserve Bank of Philadelphia.
The ATM planned along 38th Street would be the bank's first standalone ATM, Nelson said. In her view, it's a slight to the neighborhood.
"Why is the only Black neighborhood they are putting a presence in," Nelson said, "the only one that gets the ATM?"
'Transforming lives': Neighborhood leaders defend the bank
Despite what the numbers show, bank advocates are encouraged by the bank's homebuying seminars at the church, along with a down-payment assistance program that recently helped an initial client, a young Black mother, buy her first home.
"They are going above and beyond to really understand the needs of transforming lives," said Ashley Gurvitz, a Devington neighborhood leader and New Direction Church member, "with all of the programs, the relationship-building and the intentional understanding of where systemic disinvestment has happened in the neighborhood."
Talley, the bank leader, said a traditional branch is no longer a necessity to build connections. COVID accelerated the rise of online banking and the decline in foot traffic in brick-and-mortar banks, with one recent report predicting that such branches could go extinct by 2041.
What's more, federal data shows that there are already four branches within two miles of the Devington neighborhood limits. The need would be more dire if the area were designated a " banking desert."
At the December event announcing the partnership, Talley said it's most important for bankers to build trust in conversations with Black residents, no matter where they meet.
"Trust is one of the keys," Talley said, "because there's always been an issue of trust between the banking community and people that have been underserved in the past."
'Rolling their sleeves up': ATM approved with support of key City-County Council members
In a June 17 zoning hearing, city planners recommended denial of the rezoning required for the ATM, but their opposition apparently had nothing to do with the bank's lending history.
Planning staff said a standalone ATM is misaligned with the transit-oriented, walkable development planned along 38th Street around IndyGo's Purple Line. Talley rejected their suggestion to attach the ATM to the church, saying he wants New Direction's building to remain free of any crime and vandalism that the machine may attract.
After Gurvitz and City-County Council members Keith Graves and Vop Osili spoke in support of the ATM, zoning officials approved the proposal despite the planners' concerns.
The fair housing group criticized Osili for neglecting to mention that his wife — Una Osili, a professor and the associate dean of the Indiana University Lilly Family School of Philanthropy — is a member of the bank's advisory board of directors.
Osili told IndyStar his decision was unrelated to his wife's role. He was simply speaking in support of a community need expressed by neighborhood leaders, he said.
Both Graves and Osili, who are Black, told IndyStar their support is unchanged by the data revealing the bank's lending habits.
Graves, who represents the Devington area, noted that the bank is far from the only institution responsible for the wealth disparities between Black and White households in Marion County and the United States at large.
NBOI is one of eight lenders among the county's Top 50 to offer less than 10% of its mortgage loans to African American borrowers, according to FHCCI data. Other poor performers include First Community Mortgage, Howard Hanna Financial Services and Horizon Bank.
"It's like many American businesses that we shop at and participate at," Graves said. "When you peel back the layers, they were following the practices that were widely accepted, and that's unfortunate.
"What I appreciate about National Bank of Indianapolis is that they are in the community, rolling their sleeves up. I challenge them to continue down this road."