The U.S. Department of Housing and Urban Development (HUD) announced the approval of a Conciliation Agreement with OceanFirst Bank, headquartered in Toms River, New Jersey. This agreement resolves a Secretary-initiated complaint against OceanFirst alleging that the bank engaged 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.
Redlining is an illegal practice where lenders avoid providing credit services to individuals living in communities of color due to the race, color, or national origin of the residents. HUD’s investigation was conducted alongside the U.S. Department of Justice (DOJ) following a referral from the Office of the Comptroller of the Currency.
“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. “Together with our partners at the DOJ, HUD remains committed to enforcing the Fair Housing Act by rooting out all forms of discrimination in housing. Today’s announcement underscores our shared commitment to achieving justice and creating equitable opportunities for Americans, particularly those who have historically been denied access.”
“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.”
“Restrictive barriers to credit and mortgage lending that disproportionately impact communities of color violate fair housing laws,” said Diane M. Shelley, Principal Deputy Assistant Secretary for Fair Housing and Equal Opportunity. “The Fair Housing Act prohibits this type of discrimination, commonly known as redlining, that has left too many Black, Indigenous, and People of Color with little to no access to homeownership and wealth building.”
HUD’s complaint alleges that from 2018 through at least 2022 OceanFirst failed to provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties. Specifically, it states that OceanFirst acquired and subsequently closed branches and loan production offices in these neighborhoods which led to failing these communities' needs due to insufficient marketing efforts and fair lending policies.
Under terms of the agreement:
- OceanFirst will invest at least $14 million in a loan subsidy fund aimed at increasing access to credit for home mortgage loans.
- Spend at least $400,000 on professional services for residents in these neighborhoods.
- Allocate at least $140,000 each year ($700,000 total) on advertising outreach.
- Maintain a full-service branch opened in December 2023 along with opening a loan production office (LPO).
- Assign or hire at least two full-time loan officers dedicated primarily to majority-Black Hispanic Asian neighborhoods.
- Designate a full-time Director of Community Lending.
- Conduct four outreach programs annually targeting real estate professionals.
- Provide six consumer education seminars per year focused on financial literacy.
OceanFirst agreed voluntarily resolve complaint without HUD issuing findings related allegations.
Individuals believing they are victims housing discrimination should contact HUD via provided phone numbers or visit their website additional information.
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