By: Richard L. Smith
OceanFirst Bank has agreed to pay more than $15 million to settle allegations of discriminatory lending practices, according to the U.S. Attorney’s Office for the District of New Jersey and the Department of Housing and Urban Development (HUD).
The bank is accused of engaging in redlining—an illegal practice of avoiding mortgage services in predominantly Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties.
The Justice Department’s complaint alleges that from 2018 to 2022, OceanFirst Bank disproportionately targeted its lending services toward majority-white communities while neglecting minority neighborhoods.
This included placing branches in predominantly white areas and closing branches in minority neighborhoods.
The bank also focused its advertising and outreach efforts on majority-white communities, discouraging people of color from seeking credit.
To resolve the claims, OceanFirst has agreed to a proposed consent order and a conciliation agreement with HUD.
Under the terms of the settlement, the bank will invest $14 million in a loan subsidy fund to improve access to mortgage and home improvement loans for residents of affected communities.
Additionally, it will spend $1.1 million on community partnerships, advertising, and outreach efforts, and will open a new loan production office in a predominantly minority neighborhood.
“This settlement, and the over $137 million in relief the Justice Department has secured for communities across the country, will help ensure that future generations of Americans inherit a legacy of homeownership that they have been too often denied,” said Attorney General Merrick B. Garland.
The Justice Department's investigation into OceanFirst’s practices was initiated after a referral from the Office of the Comptroller of the Currency (OCC).
OceanFirst cooperated with the investigation and worked with the Justice Department and HUD to resolve the allegations.
The settlement is part of a broader effort by the Justice Department to combat modern-day redlining and promote equitable access to credit and homeownership for communities of color.