OceanFirst Bank Pays $15M to Settle Redlining Allegations in NJ Counties

Over $15 Million from OceanFirst Bank to Resolve Redlining Claims in New Jersey.Photo byMorristown Minute

Bank accused of discriminatory lending practices in predominantly Black, Hispanic, and Asian communities

NEW JERSEY - OceanFirst Bank has agreed to pay over $15 million to settle allegations of redlining in predominantly Black, Hispanic, and Asian neighborhoods across Middlesex, Monmouth, and Ocean Counties, the U.S. Attorney’s Office for the District of New Jersey, the Department of Justice (DOJ), and the Department of Housing and Urban Development (HUD) announced today.

The Justice Department’s complaint, filed in the U.S. District Court for the District of New Jersey, claims that from 2018 to 2022, OceanFirst Bank avoided providing mortgage lending services in these communities and instead targeted majority-white neighborhoods. The bank also closed its branches in minority neighborhoods, limiting access to financial services.

“Redlining creates an unequal playing field that unfairly prevents many persons of color from achieving the American dream of home ownership, and this type of systemic and intentional discrimination cannot and will not be tolerated. It is wholly unacceptable that redlining persists into the 21st Century, and we are committed to ensuring that all of our citizens have the chance to put down roots in their own home as this helps build stronger communities for all of us. This agreement is a major step forward in removing illegal and discriminatory barriers in residential mortgage lending in New Jersey,” said U.S. Attorney Philip R. Sellinger.

To resolve the allegations, OceanFirst agreed to invest $14 million in a loan subsidy fund to expand access to home loans for residents of affected communities, spend $1.1 million on community partnerships, education, and advertising, and open loan production offices in minority neighborhoods. Additionally, OceanFirst will hire a director of community lending to oversee mortgage services in communities of color and conduct staff training on fair lending practices.

“Redlining is not only illegal, but it unfairly closes doors of economic opportunity for thousands of families of color in this country,” said HUD Acting Secretary Adrianne Todman.

“Far too often, communities of color have been denied equal access to credit and the opportunity to build generational wealth,” Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said.

The case is part of the DOJ's Combating Redlining Initiative, launched in 2021, which has resulted in over $137 million in relief for victims of lending discrimination nationwide.

“This settlement, and the over $137 million in relief the Justice Department has secured for communities across the country, will help to ensure that future generations of Americans inherit a legacy of home ownership that they have been too often denied,” said Attorney General Merrick B. Garland. “Redlining is unlawful, it is harmful, and it is wrong. The Justice Department will continue to hold banks and mortgage companies accountable for redlining and to secure relief for the communities that continue to be harmed by these discriminatory practices.”

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