The U.S. Attorney’s Office for the District of New Jersey, the U.S. Department of Justice Civil Rights Division, and the Consumer Financial Protection Bureau (CFPB) filed a consent order today to resolve allegations that Hudson City Savings Bank (Hudson City) engaged in a pattern or practice of redlining predominantly Black and Hispanic neighborhoods throughout its major market areas with respect to the extension of residential mortgage credit. This resolution represents the Justice Department’s largest residential mortgage redlining settlement in its history.
The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the District of New Jersey. The complaint alleges that Hudson City violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA), which prohibit financial institutions from discriminating on the basis of race, color, or national origin in their mortgage lending practices. The complaint alleges that from at least 2009 to 2013, Hudson City failed to serve the credit needs of majority-Black-and-Hispanic neighborhoods throughout its lending footprint, including in New Jersey, New York City and its surrounding counties, the Bridgeport, Connecticut, and Philadelphia, Pennsylvania, metropolitan areas, and the City of Camden. Hudson City has agreed to settle this matter without contested litigation.
The lawsuit originated from a joint investigation with the Consumer Financial Protection Bureau that commenced in March 2015.
Under the terms of the proposed settlement, Hudson City will invest $25 million into a loan subsidy fund to increase the amount of credit the bank extends to majority-Black-and-Hispanic areas across its market areas. To enable the bank to make residential mortgage loans available to residents of minority neighborhoods that were not adequately served by Hudson City, the bank will further invest $2.25 million into advertising, outreach, financial education, and community partnership efforts and open two full-service branches in these neighborhoods. The settlement will require Hudson City to develop robust internal controls to ensure compliance with fair lending obligations, provide fair lending training to employees, senior management, and the Board of Directors, and create a comprehensive long-term plan to increase lending in previously redlined areas. Hudson City will pay a civil monetary penalty of $5.5 million.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA.
Anyone who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.