On September 18, 2024, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Justice (DOJ) announced it had entered into a consent order and a conciliation agreement with a New Jersey-based bank resolving allegations that the Bank had engaged in a pattern or practice of lending discrimination by redlining majority-minority communities in New Jersey in violation of the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601–3619, the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691–1691f, and Regulation B, 12 C.F.R. §§ 1002.1–1002.16.
The Departments alleged the New-Jersey based bank engaged in unlawful redlining by failing to provide home loans and other mortgage services in majority-Black, Hispanic, and Asian communities. The Departments further alleged that the Bank acquired, then subsequently closed, bank branches and loan production offices in these neighborhoods, and that this practice, combined with lackluster marketing efforts and insufficient fair lending policies, allegedly led to a failure to serve the needs of these communities.
Pursuant to the proposed consent order and the conciliation agreement, the Bank agreed to invest at least $14 million in a loan subsidy fund to increase access to home mortgage, home improvement and home refinance loans for residents of diverse neighborhoods in the area. The Bank also agreed to invest $400,000 in professional services to serve the credit needs of the residents of these neighborhoods, and an additional $700,000 on advertising, outreach, consumer financial education, and credit counseling for these communities. The Bank further agreed to maintain a branch it had recently opened in New Brunswick, New Jersey and to open a loan production office in the area. Lastly, the Bank agreed to provide financial education programming to the community, hire a Director of Community Lending, provide a fee-free ATM, and assign at least two full-time loan officers to the area.
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