The Star-Ledger

Bank Accused Of Ignoring Needs Of Minorities

The Star-Ledger — Wednesday, November 19, 2003

Star-Ledger Staff

New Jersey Citizen Action, the state's largest consumer advocacy group, has accused Hudson United Bank of failing to meet the lending needs of poor and minority residents in Newark.

Citizen Action says the Mahwah-based bank has reneged on an agreement it signed back in 1997 earmarking $5 million in loans to minority and low-income residents in Newark.

The group, which over the years has managed to persuade New Jersey's top commercial banks to commit millions of dollars to affordable housing and low-income lending, plans a protest today outside a Hudson United branch on Halsey and Academy streets in Newark.

Under a 1977 federal law known as the Community Reinvestment Act, banks are required to make loans to residents of low-income and minority communities where they take deposits.

Federal Home Mortgage Disclosure Act data for 2002 shows Hudson United made two loans to African-Americans in Newark, even though they comprise 54 percent of the residents of the city, said Citizen Action executive director Phyllis Salowe-Kaye. Also in 2002, the bank made three loans to Hispanic customers, even though 30 percent of the population in Newark is Hispanic, Salowe-Kaye said.

The initial agreement between Citizen Action and Hudson United, the third-largest bank based in New Jersey, called for the bank to make $5 million in loans to poor and minority residents in Newark. To date, the bank has only lent $717,349 in construction and mortgage loans, the group says.

Charnette Blackmon, Hudson United's community reinvestment officer, did not return calls seeking comment.

"It was all talk, no action," Salowe-Kaye said. "It's time they gave back to the community instead of sucking everything out of it."

Hudson United entered the Newark market back in 1997 with its purchase of Security National, a bank and trust with $86 million in assets and three branches in the city, Nutley and Kearny.

Security National was the subject of numerous protests by Citizen Action over the years for its poor lending record to minorities. The bank got a "needs to improve" rating from federal regulators for not meeting the credit needs of the low- and moderate-income neighborhoods it serves.

At the time of the merger, Kenneth Neilson, Hudson United's chief executive, said he was aware of Security National's poor lending record and that it would change once Hudson United took over.

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