InfoBytes Blog
DOJ, HUD resolve redlining claims with New Jersey-based bank
On September 17, the DOJ and HUD announced a settlement with a New Jersey-based bank to resolve “redlining” lending discrimination allegations. The DOJ’s complaint claimed that from 2018 through at least 2022, the bank failed to provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods in certain counties, and discouraged people seeking credit in those communities from obtaining home loans. The DOJ alleged the bank disproportionately concentrated its outreach to, and advertising efforts and presence in, majority-white neighborhoods.
To resolve the DOJ’s claims, the bank entered into a proposed consent order with HUD. Under the terms of the order, the bank is required to: (i) invest at least $14 million in a loan subsidy fund to enhance access to home mortgage, home improvement, and refinance loans for residents of majority-Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties; (ii) spend $400,000 on community partnerships for credit, financial education, homeownership, and foreclosure prevention services; (iii) spend $700,000 on advertising, outreach, financial education, and credit counseling in these neighborhoods; (iv) open a loan production office, maintain a full-service branch in these areas, and assign at least one mortgage loan officer to each location. Finally, the bank will be required to conduct a community credit needs assessment, evaluate its fair lending compliance systems, conduct staff training on fair lending, and hire a director of community lending to oversee mortgage lending development in communities of color. The DOJ acknowledged the bank's cooperation in resolving the issues.