Advocacy group New Jersey Citizen Action (NJCA) sent a letter to the Federal Reserve Bank of New York requesting that the merger of Provident Financial Services, the parent company of Provident Bank, and Lakeland Bancorp, the parent company of Lakeland Bank, only receive approval with a forward-looking New Jersey-specific Community Reinvestment Act (CRA) agreement. As part of the agreement, NJCA requested the inclusion of the settlement requirements from a recent $13 million consent order between Lakeland Bank and the Department of Justice (DOJ) for illegal redlining practices.
“Redlining is racist and illegal,” President of NJCA Phyllis Salowe-Kaye said in a press release. “In the last two years, there have been more than 10 mergers approved in New Jersey. As banks get bigger, they must get better, and we cannot let them continue to refuse to make loans in our communities of color. Provident has a long-term partnership with NJCA and a strong equitable lending record, so we are hopeful they will comply with the DOJ settlement and incorporate NJCA’s additional terms once the merger is finalized.”
In the consent order issued in September 2022, the DOJ reached a settlement with Lakeland Bank for engaging in “redlining” practices in the Newark metropolitan area which violated the Fair Housing Act and denied low- and moderate-income and Black, Indigenous, and people of color (BIPOC) borrowers.
“I join with NJCA in asking that the merger of Provident and Lakeland be approved only with a CRA agreement that includes the recent $13 million consent order between the U.S. and Lakeland for its illegal redlining,” Newark Mayor Ras Baraka said. “I also ask that because Newark was most impacted by Lakeland’s redlining, that the CRA agreement also include all of NJCA’s recommendations that are Newark and New Jersey-specific. I commend NJCA for its strong leadership in the fight to stop redlining in New Jersey.”
NJCA is asking for the following terms to be included in the agreement:
- Develop specific and measurable goals to provide below market mortgages, discounted home improvement loans, small business loans, construction and permanent financing and loans for community and economic development.
- Establish a statewide Community Advisory Board (CAB) composed of diverse community leaders who work with the LMI BIPOC population.
- Work with the CAB and other community organizations to determine if additional branches or services are needed if the merger results in branch closures.
- Develop a transparent process that includes community input when determining where to locate the second branch required in the DOJ consent order.
- Establish “Listening Sessions” with high level key bank staff to provide them with information on the needs of the LMI BIPOC community.
- Invest in the “NJ Forty Acres and a Mule Fund” (NJ FAM FUND) for real estate and small business development for Black and Latino partners