Redlining's impact persists in NJ, officials say, as lending by local banks draws scrutiny
Redlining — in which banks refuse to provide mortgages and other financial services to people of color based on where they live — has an ugly history in the U.S., dating back at least to the 1930s.
But the practice hasn't gone away, even in modern-day New Jersey. At a recent forum hosted by the U.S. Department of Justice at Seton Hall University Law School, officials and activists said redlining's impact persists to this day in the Garden State, as evidenced by recent settlements against two lenders in the region.
Lakeland, Trident Mortgage settle redlining cases
In September, Passaic County-based Lakeland Bank, which operates numerous branches in North Jersey, settled for $13 million with the Justice Department after the bank allegedly "failed to provide mortgage lending services to Black and Hispanic neighborhoods in the Newark metropolitan area" between 2015 and 2021, a Justice Department statement said.
Two months earlier, Philadelphia-based Trident Mortgage Co. agreed to pay more than $20 million to settle with the Justice Department. Trident discriminated against Black and Hispanic families applying for mortgages and refinanced loans in the greater Philadelphia area, including South Jersey and Delaware, authorities said.
Racial gap in NJ homeownership
The New Jersey Institute for Social Justice, in a 2020 report, laid out the damaging legacy of redlining in furthering New Jersey’s racial wealth gap. Among its findings was that 77% of New Jersey’s white households own a home while only 41% of Black households can say the same.
Settlement: Lakeland Bank agrees to $13M settlement over 'redlining' of Black, Hispanic customers
More: Subsidized loans available for Delawareans impacted by redlining after $20M settlement
Ryan Haygood, the institute's CEO, was one of the several participants at the April 19 forum in Newark that addressed redlining.
Tale of two cities: Newark and Millburn
Haygood said the impact of redlining is clear today from looking at two North Jersey municipalities just 8 miles apart: Newark and Millburn.
Twenty-three percent of Newark residents own their homes, which have a median value of $231,000, he noted. In Millburn, 81% of residents are homeowners and the properties' median value is $1.1 million. Newark is 49% Black and 12% white, and Millburn is 57% white and 2% Black, according to the 2020 census.
"That's a function of redlining. Yes, we talk about redlining in the past, but we continue to live in the view of, we live in the shadow of, we live with the vestiges of that practice," Haygood said.
State, federal initiatives on discriminatory lending
U.S. Assistant Attorney General Kristen Clarke said during the forum that the Justice Department has been vigilant in fighting the problem through its Combatting Redlining Initiative, which since October 2021 has secured nearly $85 million dollars to put back into communities victimized by lending discrimination.
"We are committed to eradicating these unlawful practices that have caused harm to communities of color for far too long," Clarke said.
New Jersey Attorney General Matthew Platkin said there's still work to be done in dealing with redlining in New Jersey and nationwide. However, he was adamant that "New Jersey’s strong housing laws and our federal fair lending laws send the message that we will not tolerate discriminatory practices in housing access."
Ricardo Kaulessar is a culture reporter for the USA TODAY Network's Atlantic Region How We Live team. For unlimited access to the most important news, please subscribe or activate your digital account today.
Email: kaulessar@northjersey.com
Twitter: @ricardokaul
This article originally appeared on NorthJersey.com: Redlining in NJ: Seton Hall panel sees lasting legacy of lending gap
