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Assistant Attorney General Kristen Clarke Delivers Remarks Announcing Actions Regarding Lending Discrimination in Newark Metro Area


Washington, DC
United States

Remarks as Prepared for Delivery

Good morning. I am Kristen Clarke, Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice. It is my honor to be joined today with U.S. Attorney Phillip Sellinger for the District of New Jersey.

Ending redlining is a critical step in our work to close the widening gaps in wealth between communities of color and others.

Less than one year ago, Attorney General Merrick B. Garland announced the Justice Department’s Combating Redlining Initiative – our most aggressive and coordinated effort to address redlining. At that announcement, I stated that we have a duty to act now because persisting racial inequality and widening wealth gaps make clear that staying the course is not enough. Bold, new action must be taken to eradicate redlining, and move closer to the goal of equal opportunity in our country.

Through this initiative, the Civil Rights Division is working to make fair access to credit a reality in communities of color across the country – and we are doing so in partnership with U.S. Attorneys’ Offices.

Today I am pleased to announce that we have secured a $13 million settlement with Lakeland Bank. The agreement resolves allegations that Lakeland redlined predominantly Black and Hispanic neighborhoods in the Newark, New Jersey, area.  This 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. Through this agreement, we are sending a strong message to the financial industry that we will not stand for discriminatory and unlawful barriers in residential mortgage lending. U.S. Attorney Sellinger, our partner in this matter, will discuss this settlement in greater detail shortly. 

Since August 2021, CRT has resolved four redlining cases. Collectively, these settlements provide over $38 million in relief for borrowers in Houston, Memphis, Philadelphia and Newark. Never before has the department resolved four redlining cases in shortly over one year. 

  • Cadence Bank – Houston, Texas (Aug. 31, 2021) - $4.17 million subsidy fund
  • Trustmark National Bank – Memphis, Tennessee (Oct. 27, 2021) - $3.85 million subsidy fund
  • Trident Mortgage Co – Philadelphia, Pennsylvania (July 27, 2022) - $18.4 million subsidy fund (first settlement involving non-depository institution
  • Lakeland Bank – Newark, New Jersey (Sept. 28, 2022) - $12 million subsidy fund

Our colleagues in the District of New Jersey have been critical partners in our efforts to combat redlining. In 2015, we partnered with this office to resolve our largest redlining settlement of $25 million against Hudson City Savings Bank. Through that settlement, approximately 2,600 borrowers received mortgage loans in previously redlined communities of color. Over 2,000 of the loans were used to purchase homes, thereby providing an opportunity to generate wealth through home equity.

Through our redlining compliance work, we have observed that the provisions in our consent orders yield substantial benefits not just for impacted borrowers, but also for broader communities and for lenders. 

  • First, we are creating homeownership opportunities for borrowers, and especially borrowers of color. One of the biggest hurdles to buying a home is saving sufficient funds for the down payment. This is especially true as potential borrowers face the challenges of inflation. The down payment assistance provided through the subsidy funds in our settlements literally opens the doors of homeownership to qualified borrowers and puts them on a path to generate wealth.
  • Second, we are strengthening and developing partnerships between lenders and community organizations. Partnerships with community groups are often significant to both help lenders gain credibility in communities where they have not had a presence and to connect them with homeownership ready borrowers. Often times, these groups are essential in helping lenders assess the credit needs of a community.
  • Third, we are increasing business opportunities for lenders. When lenders commit to serving underserved markets, they increase the number of profitable loans that can be made to qualified borrowers. They often go from trailing their peers to leading their peers in generating applications and originating loans in communities of color. Through strengthening their compliance management systems, they also are less likely to be investigated or sued for fair lending concerns.

We hope that this settlement sends a strong message regarding our commitment to ending redlining across the nation. We encourage lenders to be proactive in assessing whether they are serving all communities. We also encourage lenders to be like Lakeland and proactively commit to remedying redlining concerns that have been identified.

I will now turn it over to U.S. Attorney Sellinger to provide more information about our resolution with Lakeland Bank.

Civil Rights
Updated September 28, 2022