On September 18, 2024, the HUD announced the approval of a Conciliation Agreement with OceanFirst Bank for engaging in redlining by restricting access to credit and mortgage lending services in majority-Black, Hispanic, and Asian neighborhoods in the New Brunswick, New Jersey area. The HUD’s investigation was conducted alongside the DOJ after a referral from the OCC.
The HUD found that from 2018 to 2022, OceanFirst Bank engaged in unlawful redlining on the basis of race, color, and national origin through redlining in the New Brunswick Lending Area. In particular, the HUD alleges that OceanFirst restricted access to its credit and mortgage lending services for residents of, and those seeking credit for, properties in majority-Black, Hispanic, and Asian neighborhoods through its acquisition and closure of branches and loan production offices in the said areas. The Bank allegedly conducted insufficient marketing efforts and fair lending policies that led to its loan officers not serving the needs of residents in majority-Black, Hispanic, and Asian census tracts. OceanFirst neither admits nor denies these claims but has agreed to settle with the HUD.
Under the terms of the Agreement, OceanFirst will:
Invest at least $14 million in a loan subsidy fund with the goal of increasing access to credit for home mortgage loans, home improvement loans, and home refinance loans in majority-Black, Hispanic and Asian neighborhoods in the New Brunswick area;
Spend at least $400,000 on professional services for residents in these neighborhoods to increase access to residential mortgage credit and serve the credit needs of those communities;
Spend at least $140,000 each year of the Agreement ($700,000 total) on advertising, outreach, consumer financial education, and credit counseling in these neighborhoods;
Maintain a full-service branch opened in December 2023 and open a loan production office (LPO) located in these neighborhoods;
Assign or hire at least two full-time loan officers to solicit mortgage applications primarily in majority-Black, Hispanic, and Asian neighborhoods in the New Brunswick area;
Hire or designate a full-time position of Director of Community Lending;
Provide at least four outreach programs per year for real estate brokers and agents, developers, and public or private entities engaged in residential real estate-related business in these neighborhoods;
Provide at least six consumer education seminars per year targeted and marketed toward residents of neighborhoods of color in the New Brunswick area to cover credit counseling, financial literacy, or other related consumer financial education; and
Comply with HUD’s Guidance on Application of the Fair Housing Act to the Advertising of Housing, Credit, and Other Real Estate-Related Transactions through Digital Platforms for all OceanFirst’s advertising and targeting.
Read the HUD’s announcement here.
The Agreement can be found here.