OceanFirst Bank will pay $15 million to settle allegations brought by HUD and the DOJ that it engaged in redlining practices by restricting access to credit and mortgage lending services in majority-Black, Hispanic, and Asian neighborhoods in the New Brunswick, N.J., area.
“Redlining is not only illegal, but it unfairly closes doors of economic opportunity for thousands of families of color in this country,” says Adrianne Todman, acting secretary for HUD, in a statement. “Together with our partners at the DOJ, HUD remains committed to enforcing the Fair Housing Act by rooting out all forms of discrimination in housing.”
“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,” adds Attorney General Merrick B. Garland.
HUD’s complaint alleges that, from 2018 through at least 2022, OceanFirst failed to provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties.
Specifically, the complaint alleges states that OceanFirst acquired and subsequently closed branches and loan production offices in these neighborhoods, which, coupled with its insufficient marketing efforts and fair lending policies, led to OceanFirst failing to serve the needs of these neighborhoods.
Under the terms of the settlement, OceanFirst will invest at least $14 million in a loan subsidy fund with the goal of increasing access to credit for home mortgage loans, home improvement loans, and home refinance loans in majority-Black, Hispanic and Asian neighborhoods in the New Brunswick area and spend at least $400,000 on professional services for residents in these neighborhoods to increase access to residential mortgage credit and serve the credit needs of those communities through partnerships with one or more community-based or governmental organizations that provide services related to credit, financial education, homeownership, and/or foreclosure prevention.
In addition it must spend at least $140,000 each year of the agreement ($700,000 total) on advertising, outreach, consumer financial education, and credit counseling in these neighborhoods, maintain a full-service branch opened in December 2023, and open a loan production office (LPO) located in these neighborhoods, among additional terms and conditions.
HUD’s investigation into the bank’s practices was conducted alongside the U.S. Department of Justice (DOJ) after a referral from the Office of the Comptroller of the Currency, the bank’s regulator.
Photo: Wesley Tingey