A settlement was reached in response to bank’s discriminatory redlining practices; statewide nonprofit has filed affidavit in federal court
Newark—New Jersey Citizen Action (NJCA) today condemned the Trump administration’s Department of Justice May 28th motion to terminate a consent order with Lakeland Bank (now Provident Bank), a $13 million settlement reached in response to Lakeland’s discriminatory redlining practices targeting people of color in and around Newark and other parts of the state.
NJCA’s sister organization, New Jersey Citizen Action Education Fund (NJCAEF) today filed an affidavit for an amicus brief in federal court to halt the termination. The consent order settlement was reached with the Biden administration’s Department of Justice, following allegations that Lakeland’s redlining practices were systematic and intentional, barring Black and Hispanic people from the most reliable path to building generational wealth — home ownership.
“This is yet another example of how the Trump administration has no respect for the law or the needs of low-and moderate-income communities, and in particular the needs of people of color,” said NJCA Executive Director Dena Mottola Jaborska. “It’s unconscionable that the Department of Justice would vacate its own consent order to a bank that violated the law by denying black and brown families equitable access to homeownership and other critical financial tools.”
Lakeland was ordered to create a $12 million “loan subsidy” fund to offset closing costs, mortgage insurance premiums, down payments, and more for people in Black and Hispanic neighborhoods in Essex, Somerset, and Union counties who apply for mortgages and home improvement and refinancing loans; another $1.1 million was to be spent on advertising, financial counseling, and community development in these areas.
“This funding and these programs are critical to remediate the impact of redlining,” said Leila Amirhamzeh, NJCA Director of Community Reinvestment (CRA). "While Lakeland/Provident Bank has been working with community partners, including NJCAEF, to implement the already agreed upon consent order, the Trump Administration’s efforts to terminate the order sends a clear message to financial institutions that it will not hold banks accountable for discriminatory redlining practices. Without the order, these underserved communities will have even less access to the housing opportunities that they deserve and which a long history of redlining has denied them. We strongly urge the courts to allow the consent order to continue in the interests of social, economic and financial justice.”