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Press Release

Justice Department And Consumer Financial Protection Bureau Reach Settlement With Hudson City Savings Bank To Resolve Allegations Of Mortgage Lending Discrimination

For Immediate Release
U.S. Attorney's Office, District of New Jersey

Settlement Provides Over $27 Million to Ensure Equal Lending Services to Predominantly Black and Hispanic Communities

NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey, the U.S. Department of Justice Civil Rights Division, and the Consumer Financial Protection Bureau (CFPB) filed a consent order today to resolve allegations that Hudson City Savings Bank (Hudson City) engaged in a pattern or practice of redlining predominantly Black and Hispanic neighborhoods throughout its major market areas with respect to the extension of residential mortgage credit.  This resolution represents the Justice Department’s largest residential mortgage redlining settlement in its history.

The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the District of New Jersey.  The complaint alleges that Hudson City violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA), which prohibit financial institutions from discriminating on the basis of race, color, or national origin in their mortgage lending practices.  The complaint alleges that from at least 2009 to 2013, Hudson City failed to serve the credit needs of majority-Black-and-Hispanic neighborhoods throughout its lending footprint, including in New Jersey, New York City and its surrounding counties, the Bridgeport, Connecticut, and Philadelphia, Pennsylvania, metropolitan areas, and the City of Camden.  Hudson City has agreed to settle this matter without contested litigation.

“Hudson City Savings Bank structured its business operations to systemically avoid providing credit services in predominantly minority neighborhoods. There is no room for such behavior in our banking system,” U.S. Attorney Fishman said. “In addition 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.”

“This case should send a message to lenders throughout the country that the Justice Department will not tolerate racial discrimination in the extension of credit,” Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, said.  “A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services.  We encourage all lenders to proactively identify responsible lending opportunities that exist in predominantly minority neighborhoods within their lending areas.”

“We allege that Hudson City's redlining practices illegally cut off opportunities for consumers in predominantly Black and Hispanic neighborhoods to get a mortgage and achieve the dream of homeownership,’ CFPB Director Richard Cordray said. “Without access to affordable credit, neighborhoods deteriorate in the long shadow cast by unfair lending. Today’s action seeks to remove the redline by bringing $27 million in mortgage subsidies and outreach programs, along with new bank branches to the communities who should have had access from the beginning.”

The lawsuit originated from a joint investigation with the Consumer Financial Protection Bureau that commenced in March 2015.

Under the terms of the proposed settlement, Hudson City will invest $25 million into a loan subsidy fund to increase the amount of credit the bank extends to majority-Black-and-Hispanic areas across its market areas.  To enable the bank to make residential mortgage loans available to residents of minority neighborhoods that were not adequately served by Hudson City, the bank will further invest $2.25 million into advertising, outreach, financial education, and community partnership efforts and open two full-service branches in these neighborhoods.  The settlement will require Hudson City to develop robust internal controls to ensure compliance with fair lending obligations, provide fair lending training to employees, senior management, and the Board of Directors, and create a comprehensive long-term plan to increase lending in previously redlined areas.  Hudson City will pay a civil monetary penalty of $5.5 million.

The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division.  Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA.  The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.

A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at

The government is represented by Assistant U.S. Attorneys Michael E. Campion and Svetlana Eisenberg of the District of New Jersey, and Trial Attorney Ronald Lee, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.

The Civil Rights Division, the U.S. Attorney’s Office for the District of New Jersey, and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information on the task force, visit

Updated September 24, 2015

Press Release Number: 15-352