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A mortgage lender and the Justice Department have settled their discrimination claims against communities of color in three counties of New Jersey for $13 million.
According to Assistant Attorney General Kristen Clarke, a $12 million subsidy fund will be created by the Civil Rights Division’s settlement with Lakeland Bank. The bank will be required to offer equal credit opportunities to all.
“The agreement resolves allegations that Lakeland redlined predominantly Black and Hispanic neighborhoods in the Newark, New Jersey, area,” Clarke said Wednesday. “This settlement demonstrates our firm commitment to combating modern-day redlining and holding banks and other lenders accountable when they denied people of color equal access to lending opportunities.”
Justice Department officials have taken an active role in combating redlining, the practice of denying housing loans to those living in specific neighborhoods regardless of their eligibility.
Since 2015, Lakeland Bank knew of the risks associated with its redlining conduct but didn’t take any meaningful action. Philip Sellinger, the US attorney for the District of New Jersey, estimates that an extra $120 million in loans could have been provided.
“There were qualified borrowers in these areas. Lakeland just didn’t service them,” Sellinger said.
In addition to filing a complaint against the bank, Sellinger said his office proposes a consent decree requiring the bank to open two new branches in minority communities.
He said, “Redlining is racist, pure, and simple. It has no place in this country.”
