OceanFirst Bank, N.A. has agreed to pay more than $15 million to settle allegations of lending discrimination, specifically redlining, which has disproportionately affected predominantly Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean Counties.
The settlement was announced on September 18, 2024, by the U.S. Attorney’s Office for the District of New Jersey, the Justice Department’s Civil Rights Division, and the Department of Housing and Urban Development (HUD).
Redlining, a discriminatory practice where lenders avoid providing credit to communities of color, has been identified as a significant barrier to homeownership and economic equity.
The federal complaint alleged that from 2018 to 2022, OceanFirst Bank engaged in practices that discouraged mortgage lending in these communities, focusing instead on majority-white neighborhoods.
Under the terms of the proposed consent order, subject to court approval, OceanFirst has committed to invest at least $14 million in a loan subsidy fund aimed at improving access to mortgages, home improvement, and refinance loans for affected neighborhoods. Additionally, the bank will allocate funds for community partnerships and educational outreach efforts to support residents in these areas.
Civil rights advocate Lisa McCormick emphasized the significance of the bank’s settlement in addressing longstanding racial inequities in New Jersey.
“New Jersey is a state of stark contrasts, marked by profound racial disparities,” said McCormick. “We see this in our public schools, where segregation persists, depriving Black and Latino students of equal educational opportunities. The same systemic issues that led to redlining are evident in our schools and neighborhoods, where wealth is concentrated and access to resources is unequal.”
The broader context of racial disparities in New Jersey highlights significant socioeconomic challenges facing communities of color.
The state exhibits some of the worst racial inequalities in the nation, with Black residents experiencing a poverty rate of 16.1% compared to 6.2% for white residents.
Black and Latino households also have median incomes considerably lower than their white counterparts—$65,400 and $70,200 respectively, compared to $109,100 for white households.
“This settlement cannot be viewed in isolation; it must be part of a larger conversation about how we dismantle the structures that perpetuate inequality across housing, education, and income,” said McCormick. “With two and a half times as many Black and Latino residents living below the poverty line compared to white residents, the economic disparities are glaring.”
“These economic disparities extend to homeownership, where rates among Black and Latino families remain significantly lower than those of white families. In many counties, homeownership rates for these groups are less than 50%, illustrating persistent inequities in access to wealth-building opportunities,” said McCormick.
The digital divide further exacerbates these issues, as Black and Latino households in New Jersey are almost twice as likely to lack internet access compared to white households. This disparity has been highlighted during the COVID-19 pandemic, which revealed the critical importance of internet access for education and economic participation.
U.S. Attorney Philip R. Sellinger said the significance of the settlement is that it represents a step forward in removing illegal barriers to home lending and fostering economic opportunities in historically marginalized communities.
“Redlining creates an unequal playing field that unfairly prevents many persons of color from achieving the American dream of home ownership,” said Sellinger.
The settlement is part of a larger initiative by the Justice Department, launched in 2021, to combat redlining and promote equitable access to credit. Since its inception, the initiative has resulted in 13 resolutions and over $137 million in relief for communities adversely affected by discriminatory lending practices nationwide.
As New Jersey continues to grapple with its legacy of structural racism, advocates emphasize the need for ongoing efforts to address these systemic issues.
“No matter what one’s Zip Code is in the Garden State, economic racial inequities are pervasive in all our backyards,” said Harbani Ahuja from the New Jersey Institute for Social Justice.