Record settlement in bank redlining case
In a settlement called the largest of its kind by the U.S. Justice Department, Hudson City Savings Bank agrees to pay more than $27 million to resolve allegations of mortgage redlining.
According to New Jersey U.S. Attorney Paul Fishman's office, the settlement was filed in conjunction with the complaint charging the institution with violations of the Fair Housing Act and Equal Credit Opportunity Act. The complaint was filed by Fishman's office, the Justice Department's Civil Rights Division, and the Consumer Financial Protection Bureau (CFPB)
Hudson City was accused of underserving credit needs of applicants in predominantly Black and Hispanic neighborhoods in its lending radius, including New Jersey, New York City and surrounding counties, the city of Camden, and metropolitan areas of Philadelphia and Bridgeport, CT, from at least 2009 through 2013.
The lawsuit grew from an investigation undertaken by Fishman's office and CFPB in March 2015. Hudson City agreed to settle without contested litigation, and to pay a $5.5 million civil penalty, authorities said.
In a prepared statement, Fishman said that there's "no room for such behavior in our banking system. In addtion to paying $25 million for a loan subsidy program, today's settlement agreement will require the bank to take a number of concrete steps to ensure that they improve access to responsible and affordable credit to qualified borrowers in Black and Hispanic neighborhoods."
Hudson City has agreed to spend $2.25 million on advertising, outreach, financial education and community engagement initiatives; open two full-service branches in applicable neighborhoods; keep a tight rein on meeting fair lending obligations; train employees and managers in fair-lending practices; and develop a long-term plan to increase lending opportunities in formerly-redlined areas.
The Justice Department web page carries a copy of the complaint and information about fair lending enforcement policies.