NEW JERSEY – OceanFirst Bank has agreed to pay over $15 million to resolve allegations of lending discrimination by redlining predominantly Black, Hispanic and Asian neighborhoods in Middlesex, Monmouth and Ocean Counties in New Jersey, the U.S. Attorney’s Office said.
According to officials, redlining is an illegal practice in which “lenders avoid providing credit services to individuals living in communities of color because of the race, color or national origin of residents in those communities.”
In October 2021, Attorney General Merrick Garland and Assistant Attorney General Kristen Clarke launched the Justice Department’s Combatting Redlining Initiative. The initiative is expanding the department’s reach by strengthening partnerships with U.S. Attorneys’ Offices around the country, regulatory partners, and its partners in state Attorneys General offices.
Since 2021, the department has announced 13 redlining resolutions and secured over $137 million in relief for communities of color that have been the victims of lending discrimination across the country.
“This settlement, and the over $137 million in relief the Justice Department has secured for communities across the country, will help to ensure that future generations of Americans inherit a legacy of home ownership that they have been too often denied,” said Attorney General Merrick B. Garland. “Redlining is unlawful, it is harmful, and it is wrong. The Justice Department will continue to hold banks and mortgage companies accountable for redlining and to secure relief for the communities that continue to be harmed by these discriminatory practices.”
From 2018 through at least 2022 OceanFirst Bank allegedly failed to provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods. The company also discouraged people seeking credit in those communities from obtaining home loans.
The specific complaint alleges that OceanFirst disproportionately focused its outreach and advertising on majority-white communities, placed its branches in majority-white neighborhoods, and closed its only branches in the majority-Black, Hispanic, and Asian neighborhoods in those counties.
The Justice Department has resolved its claims via a proposed consent order, which is subject to court approval. Additionally, OceanFirst and United States Department of Housing and Urban Development have entered into a conciliation agreement with equivalent terms. In those resolutions, OceanFirst has agreed to do the following:
• 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 majority-Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties;
• Spend $400,000 on community partnerships to provide services related to credit, consumer financial education, homeownership, and foreclosure prevention for residents of predominantly Black, Hispanic, and Asian neighborhoods in those counties;
• Spend $700,000 on advertising, outreach, consumer financial education, and credit counseling focused on predominantly Black, Hispanic, and Asian neighborhoods in those counties;
• Open a loan production office and maintain the bank’s recently opened full-service branch, both located in predominantly Black, Hispanic, and Asian neighborhoods in those counties, with at least one mortgage loan officer assigned to each location;
• Conduct a community credit needs assessment, evaluate its fair lending compliance management systems, and conduct staff trainings on fair lending; and
• Hire a director of community lending who will oversee the continued development of home mortgage lending in communities of color.
“The U.S. Attorney’s Office and the Justice Department’s Civil Rights Division opened their investigation into OceanFirst’s lending practices after receiving a referral from the bank’s regulator, the Office of the Comptroller of the Currency. OceanFirst cooperated with this investigation and worked with the Department of Justice and HUD to resolve the redlining allegations,” a press release stated.
Individuals may report lending discrimination by calling the U.S. Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.
