NEWARK – The U.S. Attorney’s Office for the District of New Jersey announced its partnership with the Justice Department’s Civil Rights Division as it launches the department’s new Combatting Redlining Initiative.
Redlining is an illegal practice in which lenders avoid providing services to individuals living in communities of color because of the race or national origin of the people who live in those communities. The new Initiative represents the department’s most aggressive and coordinated enforcement effort to address redlining, which is prohibited by the Fair Housing Act and the Equal Credit Opportunity Act.
“Lending discrimination runs counter to fundamental promises of our economic system. When people are denied credit simply because of their race or national origin, their ability to share in our nation’s prosperity is all but eliminated,” said Attorney General Garland. “Today, we are committing ourselves to addressing modern-day redlining by making far more robust use of our fair lending authorities. We will spare no resource to ensure that federal fair lending laws are vigorously enforced and that financial institutions provide equal opportunity for every American to obtain credit.”
“Redlining is a form of discrimination that has devastating consequences for communities of color.” said Acting U.S. Attorney Rachael A. Honig. “By systemically and unlawfully denying credit to those in minority neighborhoods, a bank that redlines causes those neighborhoods to deteriorate by unfairly denying residents opportunities to become a homeowner. This office has vigorously enforced the Fair Housing Act and Equal Credit Opportunity Act to combat the practice of redlining.
“In 2015, together with the Justice Department’s Civil Rights Division and the Consumer Financial Protection Bureau, we filed suit to obtain a consent order requiring Hudson City Savings Bank to end its pattern or practice of redlining predominantly Black and Hispanic neighborhoods. The consent order, which represented the Justice Department’s largest residential mortgage redlining settlement in its history, required the bank to make systemic changes to its practices and pay $25 million in loan subsidies to individuals in the redlined neighborhoods. We are pleased that, earlier this year, the bank satisfied its obligations under the schedule set forth in the consent order. This office enthusiastically joins in the Justice Department’s Combatting Redlining Initiative and will continue its work to end redlining in the District of New Jersey.”
Redlining, a practice institutionalized by the federal government during the New Deal era and implemented then and now by private lenders, has had a lasting negative impact. For American families, homeownership remains the principal means of building wealth, and the deprivation of investment in and access to mortgage lending services for communities of color have contributed to families of color persistently lagging behind in homeownership rates and net worth compared to white families. The gap in homeownership rates between white and Black families is larger today than it was in 1960, before the passage of the Fair Housing Act of 1968.
This Initiative, which will be led by the Civil Rights Division’s Housing and Civil Enforcement Section in partnership with U.S. Attorney’s Offices, will build on the longstanding work by the Division that seeks to make mortgage credit and homeownership accessible to all Americans on the same terms, regardless of race or national origin and regardless of the neighborhood where they live. The U.S. Attorney’s Office for the District of New Jersey’s Civil Rights Unit will continue its active partnership with the Civil Rights Division as it joins in this initiative. The initiative will:
• Utilize U.S. Attorneys’ Offices as force multipliers to ensure that fair lending enforcement is informed by local expertise on housing markets and the credit needs of local communities of color.
• Expand the department’s analyses of potential redlining to both depository and non-depository institutions. Non-depository lenders are not traditional banks and do not provide typical banking services, but engage in mortgage lending and now make the majority of mortgages in this country.
• Strengthen our partnership with financial regulatory agencies such as to ensure the identification and referrals of fair lending violations to the Department of Justice.
• Increase coordination with State Attorneys General on potential fair lending violations.
Individuals may report lending discrimination by calling the Justice Department’s Housing Discrimination Tip Line at 1-833-591-0291, or submitting a report online. Complaints of discrimination may also be made by contacting the United States Attorney’s Office for the District of New Jersey at (855) 281-3339 or by filing a complaint online.
