The U.S. Department of Housing and Urban Development (HUD) announced a settlement with Toms River, New Jersey-based OceanFirst Bank that resolves charges of redlining in the New Brunswick, New Jersey area.
HUD investigated the charges in a probe conducted alongside the U.S. Department of Justice (DOJ) after a referral from the Office of the Comptroller of the Currency, the bank’s regulator. HUD alleged that OceanFirst failed to provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties. OceanFirst was accused of acquiring and then closing branches and loan production offices in these neighborhoods, and the bank was also charged by not serving those neighborhoods with insufficient marketing efforts and fair lending policies.
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, the complaint alleges states that OceanFirst acquired and subsequently closed branches and loan production offices in these neighborhoods, which, coupled with its insufficient marketing efforts and fair lending policies, led to OceanFirst failing to serve the needs of these neighborhoods.
Under the terms of the settlement, 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 the impacted neighborhoods, and it will 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. It will also spend at least $140,000 each year of the settlement – a $700,000 total – on advertising, outreach, consumer financial education, and credit counseling in these neighborhoods, and it will maintain a full-service branch that opened in December 2023 and open a loan production office in these neighborhoods.
Furthermore, the bank will assign or hire at least two full-time loan officers to solicit mortgage applications primarily in the impacted neighborhoods, hire or designate a full-time position of director of community lending, and 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. It will also provide at least six consumer education seminars per year covering credit counseling, financial literacy, or other related consumer financial education.
“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.”
HUD added that OceanFirst agreed to resolve the complaint voluntarily and the department did not issue findings related to the complaint’s allegations.
Christopher D. Maher, chairman and CEO, of OceanFirst Financial Corp., stated, “The commitments we are announcing today are consistent with our bank’s 122-year history of providing credit and other financial services to all residents of the communities we serve. We look forward to continuing the bank’s efforts in the New Brunswick-Lakewood market to help meet the lending and banking needs of families, businesses, schools and organizations.”
Photo courtesy of OceanFirst Bank
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