New Jersey mortgage lender accused of redlining to pay $13M settlement

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Lakeland Bank will pay $13 million in a lawsuit over discriminating against Black and Latino communities in New Jersey.

The bank reached a settlement with the Department of Justice who accused the mortgage lender of redlining from 2015 to 2021.

Lakeland Bank accused of redlining

Redlining is the systematic practice of denying an applicant a loan for housing in a certain neighborhood even though they may be otherwise eligible for a loan. In the past, lenders would draw a red line around specific neighborhoods on a map where they wanted only people of a certain race or socioeconomic background to reside. The discriminatory practice has become a focus for the Justice Department, which has reached similar settlements with lenders in Philadelphia, Houston and Memphis.

Settlement terms

Assistant Attorney General Kristen Clarke said the Civil Rights Division’s settlement with Lakeland Bank will create a $12 million subsidy fund and the bank will be required to offer equal opportunities to obtain credit regardless of where a person lives.

In addition to the fund, the bank will open two new branches in neighborhoods of color, including at least one in the city of Newark.

“The agreement resolves allegations that Lakeland redlined predominantly Black and Hispanic neighborhoods in the Newark, New Jersey, area,” Clarke said at a news conference on 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.”