The U.S. Department of Housing and Urban Development (HUD) has made 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. HUD’s investigation was conducted with the U.S. Department of Justice (DOJ) after a referral from the Office of the Comptroller of the Currency, the bank’s regulator.
“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, and will not be allowed.”
HUD’s complaint alleges that, from 2018 through at least 2022, OceanFirst did not provide mortgage lending services to predominantly Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties. The complaint also 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 not serving the needs of these neighborhoods.
- Invest at least $14 million in a loan subsidy fund to increase 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 through partnerships with at least one community-based or governmental organizations providing services related to credit, financial education, homeownership, and/or foreclosure prevention.
- Spend at least $140,000 annually 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) in these neighborhoods. The LPO will have a community room for financial education classes that OceanFirst will provide to the public and community organizations, and include an ATM that will not charge fees to OceanFirst’s customers and maintain lower fees for non-customers than what is available at nearby ATMs.
- 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 in residential real estate-related business in these neighborhoods to inform them of the bank’s products and services.
- Provide at least six consumer education seminars annually targeted and marketed for residents of neighborhoods of color in the New Brunswick area regarding credit counseling, financial literacy, or other related consumer financial education.
- 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.
