New Jersey Bank Ordered To Pay Black And Hispanic Borrowers $13M After Depriving Them Of Loans
In a historical move, Lakeland Bank has been ordered to pay a $13 million settlement fee to Black and Hispanic residents.
According to NJ.com, Lakeland Bank was ordered by the Justice Department to pay Black and Hispanic borrowers back after it was revealed they conducted discriminatory practices to deprive them of purchasing their first home.
According to U.S. Attorney Phillip Sellinger, Lakeland Bank accepted almost five times fewer Black and Hispanic applicants than its competitors.
“Lakeland avoided serving the credit needs of borrowers in majority Black and Hispanic census tracts in the Newark (area) from obtaining mortgage loans while acting to serve the credit needs for mortgage loans in majority-white census tracts,” said the U.S Attorney’s Office for New Jersey.
“The avoidance went beyond brick-and-mortar locations. Lakeland unlawfully avoided serving neighborhoods that were Black or Hispanic while serving nearby white majority suburbs.”
“This form of discrimination has been barred by law for decades but still exists today. There were qualified buyers — Lakeland just didn’t service them.”
As part of the settlement, Lakeland bank will have to invest a minimum of $12 million in a loan fund to help increase credit for a home mortgage and refinance loans for people in predominantly Black and Hispanic areas.
According to reports, the bank must also spend $400,000 on developing community partnerships to help make residential mortgages more accessible to people of all backgrounds.
“The settlement demonstrates our firm commitment to combating modern-day redlining and holding banks and other lenders accountable when they deny people of color equal access to lending opportunities,” said Assistant Attorney General Kristen Clarke of the U.S. Justice Department’s Civil Rights Division.