DOJ, Lakeland redlining settlement contested by advocates

Fair housing organizations are pushing back against the early termination of a consent order between the Department of Justice and Lakeland Bank over a redlining settlement.

The Public Interest Law Center filed a proposed amicus curiae brief arguing against a joint motion to end another Biden-era redlining agreement early. The document said the New Jersey-based bank failed to complete portions of its obligations under the order, despite the government deeming it "satisfied."

"A request to terminate a consent order often requires a knotty analysis by a court that entails evaluating barriers to the order's completion and balancing a proposed modification against the aims of the order and the public interest," the filing said. "Not here. Instead, the United States only asks this Court to deem this Consent Order "satisfied." But the reality is plainly to the contrary."

The law center, based in Philadelphia, said the consent order still requires the bank to pay $4.25 million in loan subsidies to residents of Newark, New Jersey. At $15,000 per subsidy, this represents 283 additional families. 

Lakeland also must spend $162,500 pursuant to the order's Community Development Partnership Program and nearly $300,000 on additional advertising, community outreach, consumer financial education and credit counseling.

Beyond money, Lakeland still has about two more years of requirements, including: 

• providing appropriate fair lending training to its staff;
• employing a Community Development Officer who has the obligation to monitor the efforts made pursuant to the loan subsidy fund, coordinate outreach efforts and encourage more lending within majority-Black and Hispanic neighborhoods;
• maintaining specific branch locations and staff.
  

Fair housing organizations have attempted to get involved in this case before. In June, three nonprofits, New Jersey Citizen Action Education Fund, the Housing Equality Center of Pennsylvania and the National Fair Housing Alliance, filed a brief that argued much of the same points as the law center.

But the DOJ and Lakeland filed separate motions soon after asking the court to deny their request to participate in the case, with both saying the bank implemented protocols that should satisfy any alleged wrongdoing related to the settlement.

"There is no role for amici where, as here, a party has settled a case with a government enforcement agency, has complied with the terms of settlement, and the government agency exercises its enforcement discretion to terminate the order encompassing the settlement before the expiration of the order's full term," an attorney representing Lakeland Bank wrote in a June filing.

The DOJ initially pushed to terminate the consent order in late May, after Lakeland was hit by one of the costliest redlining settlements in the agency's history in 2022.