Feds Say Hudson City Savings Avoided Black and Hispanic Areas for Mortgage Lending

8f130e6e826e80cbc84f_1487335_10152065120784030_1253627136_n.jpg
Credits: facebook.com/DOJ
8f130e6e826e80cbc84f_1487335_10152065120784030_1253627136_n.jpg

NEWARK, NJ - Faced with charges it purposely steered clear of predominantly black and Hispanic areas when offering residential mortgages, Hudson City Savings Bank has agreed to pay a $5.5 million fine and spend more than $27 million on loan programs for the affected areas.

The settlement was announced by the U.S. Attorney’s Office’s New Jersey Office which described it as “largest residential mortgage redlining settlement” in U.S. Department of Justice history.” The consent order is subject to court approval.

The government said Hudson City,  which has a branch location at 341 Springfield Avenue in Summit, “engaged in a pattern or practice of redlining predominantly Black and Hispanic neighborhoods throughout its major market areas with respect to the extension of residential mortgage credit.” Redlining is a term used to describe a practice in which lenders, figuratively speaking, draw a line around areas where they don’t want to do business.

Sign Up for E-News

“The complaint alleges that Hudson City violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA), which prohibit financial institutions from discriminating on the basis of race, color or national origin in their mortgage lending practices,” said a statement from the U.S. Attorney’s Office.

It said the complaint against Hudson City alleged the company engaged in relining “from at least 2009 to 2013,” all across its business area including New Jersey. “Hudson City Savings Bank structured its business operations to systemically avoid providing credit services in predominantly minority neighborhoods,” said U.S. Attorney Paul Fishman in a statement. “There is no room for such behavior in our banking system.”

However, although it agreed to the consent order’s terms, Hudson Savings asserted it did not engage in the discriminatory lending. It said it agreed to the settlement only to avoid a court battle with the federal government.

“Hudson City asserts that throughout the period of time at issue in this proceeding and to the present, it has treated all of its customers fairly and without regard to impermissible factors such as race and national origin,” says a “Position of Defendant” section of the consent order. “Hudson City believed that it was satisfying its obligations to meet the credit needs of majority-Black-and-Hispanic neighborhoods by purchasing from other lenders FHA-guaranteed mortgages that were secured by residential properties in majority Black-and-Hispanic neighborhoods.”

Additionally, Hudson City said that, rather than fight the allegations, it is going to “devote its resources to providing fair credit services to eligible persons, and to providing important and meaningful assistance to borrowers in certain markets.”

The settlement requires Hudson City to spend $25 million on a “loan subsidy fund to increase the amount of credit the bank extends” to people in black and Hispanic dominated areas. It also requires the company to spend $2.25 million to open two new branches in those neighborhoods and to engage in advertising and other forms of “outreach” to attract borrowers there.

 “This case should send a message to lenders throughout the country that the Justice Department will not tolerate racial discrimination in the extension of credit,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services.”

The case began in March with a joint investigation by the Consumer Finance Protection Bureau (CFPB). Bureau director Richard Cordray said Hudson City’s practices limited the chance for people in black and Hispanic neighborhoods to participate in “the dream of home ownership.” He asserted that redlined neighborhoods “deteriorate in the long shadow cast by unfair lending.”

A copy of the complaint can be obtained from the Justice Department’s website.

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

Summit

Upcoming Events

Carousel_image_1cef87cbdacf9defb471_c9d423b6982ac3168cd6_adobestock_53537383_storytelling

Thu, May 24, 10:00 AM

Summit Free Public Library, Summit

Ages 1-5 yrs.: Spanish Storytime

Arts & Entertainment Education

Carousel_image_37b1d582821947944262_c6711052bf7af8828231_storytime_0317

Thu, May 24, 10:00 AM

Summit Free Public Library, Summit

Spanish Storytime

Arts & Entertainment Education

Summit Police Blotter

May 17, 2018

4/24 - At 0728 hours a report was taken for a theft of two (2) sandwiches from a business on Morris Avenue. The manager reported that at approximately 0330 hours a male entered the business and removed two sandwiches from a refrigerated case. After doing so, he exited the store without paying for them. The male suspect was described as Hispanic, approximately 6’0”wearing a blue/gray ...

Video: Point View's Dietze Reviews Investment Strategies as Trade Tensions with China Calm

May 23, 2018

Point View Wealth Management's Founder, President and Chief Investment Strategist, David Dietze, live on FOX Business on investment strategies in the wake of the thawing of Chinese trade tensions.

ptview.com/medias/tv-radio

For more than 25 years, Point View Wealth Management, Inc. has been working with families in Summit and beyond, providing customized portfolio ...

Video: Point View's Petrides Talks Current Events That Could Be Market Movers

Point View Wealth Management's Managing Director and Portfolio Manager, John Petrides, live on CNBC discussing events that could move the market this week:

.ptview.com/medias/tv-radio

​​​For more than 25 years, Point View Wealth Management, Inc. has been working with families in Summit and beyond, providing customized portfolio management services and comprehensive ...

Stocks Can Rise in a Rising Interest Rate Environment

Investors remain concerned about the potential impact of higher interest rates on stocks. In their most recently released minutes, the Federal Reserve Open Markets Committee indicated the US economy is on solid footing and the economic conditions warrant continued gradual increasing of interest rates. This set off a sale in the stock and bond markets as investors began pricing in a fourth ...

AtlantiCast

AtlantiCast: Episode 15

On this week’s AtlantiCast, learn some important tips for controlling and avoiding diabetes from an Atlantic Health System expert, see how Atlantic Health is advancing cutting-edge research, hear what’s being done to keep health care environmentally friendly and much more!

 

Managing the Ups and Downs of First-Time Homebuying

They accepted our offer, now what?

At times both equally exhilarating and terrifying, the purchase of a home can be a total roller coaster ride -- especially when it is your first time going through the process. Between suddenly being expected to understand the intricacies of contracts and the inner workings of a home, you are also expected to start writing checks for amounts you may ...

SURVIVING A STROKE: Quick Medical Response Gives Mom Her Life Back

Carotid artery dissection. It’s one of the most common causes of stroke in younger adults.

And while you might not associate the word “stroke” with younger patients, the condition – if not treated immediately – could lead to paralysis and even death.

Lindsey Singh can attest to the importance of immediacy. The 31-year-old mother of two from Flanders experienced ...

A Royal Pain

I went to a big wedding over the weekend.  It was in England.

I like to think I was invited, but according to the Royal Guards and the Thames Valley Police I was not.  But more about that later.

You see, not too long ago I received an evite addressed to me from H&M@royalwedbot.co.uk.  Curiously, it was in my spam folder with a warning message. For an evite it was pretty ...