Feds Seek To Squash Biden-Era ‘Redlining’ Settlement In Newark Area

NEWARK, NJ — The Trump administration recently filed court papers in an attempt to end a federal settlement with a large corporate bank in New Jersey, a move that has seen harsh criticism from advocates in Newark, including Mayor Ras Baraka.

Nearly three years ago, the U.S. Department of Justice announced that it reached an agreement with Lakeland Bank involving one of the largest “redlining” settlements in the history of the U.S. Department of Justice.

The housing discrimination allegedly took place in Black and Hispanic neighborhoods of the Newark area.

What is redlining? According to the U.S. Department of Justice:

“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.”

Lakeland Bank agreed to several conditions as part of the consent order, including investing at least $12 million in a loan subsidy fund for residents of Black and Hispanic neighborhoods in the Newark area, and opening new branches in “neighborhoods of color.”

The North Jersey-based business has since merged with Provident Bank in a $1.3 billion deal.

Last week, federal prosecutors asked a judge to end the government oversight nearly two years early. If granted, the move would nix the consent order negotiated under the administration of former President Joe Biden.

In their motion, the Justice Department claimed that Lakeland Bank has “demonstrated a commitment to remediation” and “reached substantial compliance” involving the terms of the consent order.

A Provident spokesperson told NorthJersey.com and the USA Today Network New Jersey that the bank remains committed to the loan subsidy initiative. Advocates remain leery, however.

Baraka said that redlining has been used as a weapon for racist discrimination in the past – and it continues to be a problem.

“I condemn this act as a betrayal of the people who were harmed, and of decency itself,” the mayor said, calling on the Justice Department to let the consent order play out.

Newark’s mayor also urged Provident to uphold the terms of the settlement – with or without a consent decree.

• See Related: Baraka Shares Plan To Tackle Housing Crisis If Elected NJ Governor

Earlier this week, nonprofit advocacy group New Jersey Citizen Action (NJCA) filed an affidavit for an amicus brief in federal court to halt the termination.

“This is yet another example of how the Trump administration has no respect for the law or the needs of low-and moderate-income communities, and in particular the needs of people of color,” NJCA executive director Dena Mottola Jaborska alleged.

“It’s unconscionable that the Department of Justice would vacate its own consent order to a bank that violated the law by denying black and brown families equitable access to homeownership and other critical financial tools,” Jaborska added.

Leila Amirhamzeh, the group’s director of community reinvestment, agreed with Jaborska.

“The Trump administration’s efforts to terminate the order sends a clear message to financial institutions that it will not hold banks accountable for discriminatory redlining practices,” Amirhamzeh said.

“We strongly urge the courts to allow the consent order to continue in the interests of social, economic and financial justice,” Amirhamzeh added.

The NJCA – a statewide coalition that supports “social, racial and economic justice” – recently announced that it will be terminating its Fair Housing Program due to cuts from the administration of President Donald Trump and the Department of Government Efficiency (DOGE).

• See Related: NJ Nonprofit Will End Fair Housing Program Due To Trump Cuts

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