New Jersey’s OceanFirst Bank settles US redlining charges

By Jonathan Stempel

(Reuters) -New Jersey’s OceanFirst Bank will invest at least $14 million in a loan subsidy fund to resolve a U.S. Department of Justice lawsuit accusing it of illegal redlining in the central part of the state.

A proposed settlement with the unit of OceanFirst Financial was filed on Wednesday in federal court in Trenton, New Jersey, and requires a judge’s approval.

The Justice Department said that between 2018 and 2022, OceanFirst discouraged borrowers from obtaining home loans and other services in majority-Black, Hispanic and Asian neighborhoods of Middlesex, Monmouth and Ocean counties, while serving the needs of borrowers in majority-white areas.

According to the government, these practices violated the federal Fair Housing Act and the Equal Credit Opportunity Act.

A proposed five-year consent order says OceanFirst neither admitted nor denied wrongdoing, and believes it did not discriminate based on race, color and national origin.

OceanFirst nonetheless settled to avoid litigation and to instead provide “fair and equal access” to home loan services in the New Brunswick lending region, according to the order.

The 122-year-old bank also agreed to improve compliance and training, and to spend at least $1.1 million on education, foreclosure prevention, other loan services and advertising.

OceanFirst did not immediately respond to requests for additional comment.

The Red Bank, New Jersey-based company recently had 39 banking offices and about $13.3 billion of assets.

It provides services throughout the state, as well as in the New York, Philadelphia, Boston and Baltimore markets.

The Biden administration has targeted illegal residential lending practices through its Combating Redlining Initiative, which was announced in October 2021.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)