Justice Department and Department of Housing and Urban Development Secure Over $15M from OceanFirst Bank to Resolve Redlining Claims in New Jersey

 

The Justice Department’s Civil Rights Division, U.S. Attorney’s Office for the District of New Jersey and Department of Housing and Urban Development (HUD) announced that OceanFirst Bank, N.A. has agreed to pay over $15 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black, Hispanic and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties in New Jersey. 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 Garland and Assistant Attorney General Clarke launched the Justice Department’s Combating Redlining Initiative, a coordinated enforcement effort to address this persistent form of discrimination against communities of color. 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.”

“Far too often, communities of color have been denied equal access to credit and the opportunity to build generational wealth,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Through our historic efforts to combat modern day redlining, we have opened up new homeownership opportunities for impacted families and communities. This agreement underscores the Justice Department’s commitment to holding banks and financial institutions accountable for their discriminatory actions while ensuring racial and economic justice for all Americans.”

“We are committed to ensuring that everyone in New Jersey has access to the American dream of homeownership, regardless of race, color, or national origin,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “This agreement is an important step in leveling the playing field and removing illegal and discriminatory barriers in residential mortgage lending.”

“Redlining is not only illegal, but it unfairly closes doors of economic opportunity for thousands of families of color in this country,” said HUD Acting Secretary Adrianne Todman. “Together with our partners at the Justice Department, HUD remains committed to enforcing the Fair Housing Act by rooting out all forms of discrimination in housing. Today’s announcement underscores our shared commitment to achieving justice and creating equitable opportunities for Americans, particularly those who have historically been denied access.”

The Justice Department’s complaint, which was filed today in the U.S. District Court for the District of New Jersey, alleges that, from 2018 through at least 2022, OceanFirst Bank failed to provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties and discouraged people seeking credit in those communities from obtaining home loans. Specifically, the 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 HUD 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 Justice Department’s Civil Rights Division and U.S. Attorney’s Office for the District of New Jersey 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 the investigation and worked with the Justice Department and HUD to resolve the redlining allegations.

Information about the Justice Department’s fair lending enforcement work can be found at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online. Information about the U.S. Attorney’s Office’s civil rights enforcement may be found at www.justice.gov/usao-nj/civil-rights-enforcement. Individuals in the District of New Jersey may also report civil rights violations here or by calling the U.S. Attorney’s Civil Rights Hotline at (855) 281-3339.