Justice Department reaches $13 million settlement with New Jersey mortgage lender for discriminating against communities of color
By Sonia Moghe, CNN
The Justice Department has reached a $13 million settlement with a mortgage lender for discriminating against communities of color in three counties in New Jersey.
Assistant Attorney General Kristen Clarke said the Civil Rights Division’s settlement with Lakeland Bank will create a $12 million subsidy fund and the bank will be required to offer equal opportunities to obtain credit regardless of where a person lives.
“The agreement resolves allegations that Lakeland redlined predominantly Black and Hispanic neighborhoods in the Newark, New Jersey, area,” Clarke said at a news conference on Wednesday. “This settlement demonstrates our firm commitment to combating modern day redlining and holding banks and other lenders accountable when they denied people of color equal access to lending opportunities.”
Redlining, the practice of denying an applicant a loan for housing in a certain neighborhood even though they may be otherwise eligible for a loan, has become a focus for the Justice Department, which has reached similar settlements with lenders in Philadelphia, Houston and Memphis.
CNN has reached out to Lakeland Bank for comment.
Philip Sellinger, the US attorney for the District of New Jersey, said Lakeland Bank knew about the redlining risks in its conduct as far back as 2015 but did “nothing meaningful” to stop it. Sellinger said about $120 million in additional loans would have been provided if the bank had not redlined certain areas.
“There were qualified borrowers in these areas. Lakeland just didn’t service them,” Sellinger said.
Sellinger said his office filed a complaint against the bank and entered into a proposed consent decree that would require the bank to take certain measures, including opening two new branches in communities of color.
“Redlining is racist, pure and simple. It has no place in this country,” Sellinger said.
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