March 7, 2023


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Newark, NJ – March 7, 2023 – Mayor Ras J. Baraka today joined state and local advocates with community and labor leaders to call for a New Jersey-specific Community Reinvestment Act (CRA) agreement for Lakeland Bank to be added to the conditions of its merger with Provident Bank. The terms of this agreement were included in the protest against the merger filed by New Jersey Citizen Action(NJCA) with the Federal Reserve Bank of New York in December 2022 to combat the effects of Lakeland’s illegal redlining practices in 2018-2021.


Local labor unions, community development organizations, and civil rights groups representing a diverse array of Newark residents and stakeholders echoed the Mayor’s and NJCA’s demands to heal the damage caused by Lakeland’s discriminatory practices. A recording of the press conference can be viewed here.


“I join with NJCA in asking the Federal Reserve to only approve the merger of Provident and Lakeland if there is a CRA agreement that includes the $13 million Consent Order between the Department of Justice and Lakeland regarding its illegal redlining,” said Mayor Baraka. “I ask in addition that, because Newark was most impacted by Lakeland’s redlining, that the CRA agreement include all of NJCA’s recommendations that are Newark specific. I commend NJCA for its strong leadership in the fight to stop redlining in New Jersey.”


In a Consent Order issued in September 2022, the US Department of Justice reached a $13 million settlement with Lakeland for engaging “in a pattern or practice of lending discrimination by ‘redlining’ in the Newark metropolitan area,” which violated the Fair Housing Act and denied low- and moderate-income (LMI) and Black, Indigenous, and People of Color (BIPOC) consumers access to credit with reasonable interest rates and clear terms and conditions.


“Before the 2008 financial meltdown, bank branches were as common as Starbucks. But according to the FDIC, the number of branches in NJ has dropped from 3,200 in 2011 to 2,600 in 2021 – a 22% decrease and double the national decline,” said Phyllis Salowe-Kaye, NJCA President. “Lack of access to fair financial products and services puts economically marginalized communities at an even greater disadvantage. Lakeland’s systemic failure toward LMI and BIPOC consumers in the Newark area demands a CRA agreement to not only restore equity but reverse the damage they have caused.”


In addition to the $13 million for loan subsidies to Black and Hispanic borrowers, Lakeland agreed in the Consent Order to open two new branches in the affected area (one of the two in Newark), assign five employees to service these loans and customers full-time, and maintain an expanded CRA Assessment Area covering Essex, Somerset, and Union counties.


“From Camden to Newark, the evidence is clear: redlining continues to deny Black and Brown New Jerseyans access to the financial tools and credit they need to manage their personal finance and build wealth through home or small business ownership,” said Beverly Brown Ruggia, NJCA Financial Justice Program Director. “We cannot close the racial wealth gap or ensure that BIPOC businesses and families thrive in our state unless we receive meaningful commitments from banks and financial institutions to invest equitably where it is most needed in New Jersey. This is why a CRA agreement with community stakeholders for the Lakeland-Provident merger is crucial to counteracting the full damage of Lakeland’s redlining.”


Lakeland is the third largest redlining Department of Justice (DOJ) settlement in US history, and second in New Jersey. NJCA played a major role in the largest, Hudson City Savings Bank in 2015 at $27 million. M&T Bank was required to comply with Hudson’s Consent Order once their acquisition of Hudson City Savings Bank was approved, and NJCA partnered with the new bank to ensure lending goals would be met. NJCA has already met with Provident Bank on the impact of the merger and a second meeting has been scheduled for the end of March.


“Newark families and communities cannot build financial security or upward economic mobility while major banks like Lakeland engage in practices that reinforce historic, systemic inequities,” said Hazel Applewhite, Ironbound Community Corporation Chief Executive Officer. “The impact of Lakeland’s redlining must be fully and proactively ameliorated with a CRA agreement. The DOJ’s Consent Order is not a complete solution.”


In its filing with the Federal Reserve, NJCA analyzed Lakeland’s mortgage lending data for 2018-2021 in Essex, Somerset, and Union Counties, finding the bank fell substantially behind its peers in lending to lower income and minority borrowers, and especially to Black borrowers. In the latter, Lakeland’s loans to Black residents only consisted of 1.7% of its total loans, compared to 6.7% for Provident and 8.1% for other banks. The Federal Reserve of New York provided a response to NJCA's filing on February 8.


“When we speak of injustice, we are referring to real, material conditions and inequities that marginalized communities must labor under,” said Lawrence Hamm, People’s Organization for Progress Chairman. “Redlining is one of the most blatant examples of institutionalized injustice that directly affects the pocketbooks and kitchen tables of Black, Hispanic, and low-income New Jerseyans. We cannot move forward, our communities cannot prosper, while banks like Lakeland are formalizing our marginalization in their financial policies.”


NJCA found that Lakeland also fell behind other banks in branch locations in LMI minority communities. Only 4% and 7% of Lakeland’s branches were in these neighborhoods, respectively, compared to 31% and 25% for Provident, or 37% and 24% for other banks.


“Our members are working people and families of Newark that rely on local banks like Lakeland for mortgages and small business loans to build generational wealth,” said David Jude Weiner, Communications Workers of America (CWA) Local 1081 President. “The effects of redlining from decades ago can still be felt, and it is entirely unacceptable that some banks still engage in it today. We fully support a New Jersey-specific CRA agreement, and replacing the brick-and-mortar bank branches that service our members and have disappeared over the years.”


Including a CRA agreement in the merger approval would ensure Provident meets its stated commitment to community development for marginalized populations and fulfillment of the Consent Order. 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.


“Latino families in New Jersey want the same thing as other families – to provide a better future for their children and grandchildren. Redlining practices like Lakeland’s directly obstruct those families on a systematic level and further ingrain racial and economic inequities,” said Christian Estevez, Latino Action Network (LAN) President Emeritus. “All New Jerseyans deserve the same access to financial products and services that help them build generational prosperity. LAN supports additional measures in the Lakeland-Provident merger so impacted communities will not be forgotten.”


NJCA says additional commitments are needed from Lakeland in the City of Newark, which was most impacted by the bank’s redlining:


•          Hold at least two Town Hall meetings in the City of Newark to assess community needs before deciding the location of the new branch required in the Consent Order.

•          Invest in the Acquisition Fund established in the Mayor’s Equitable Growth Initiative to mitigate the effects of owner-occupied homes being purchased by large-scale investors.

•          Participate in the “Live Newark Program” to assist first time homebuyers in the city.

•          Invest in the “Neighborhood Development Fund” that turns city-owned land into residential and affordable housing.


“It has become increasingly difficult for my underserved community, older households, to address our banking needs. As branches close, it becomes problematic and far more costly for us to transport ourselves to and from greater and greater distances in order to access our banks,” said Sharon Quilter-Colucci, NJ Organizing Project member and leader from Ocean County, retired. “Use of a bank teller remains consistently higher among older households, due to lack of familiarity with the latest consumer banking technology and confusion around the bundling of bank and nonbank services. It is imperative that older New Jerseyans and other underserved communities have reasonable access to brick-and-mortar branches, or they will be financially left behind.” NJCA has proposed the second of Lakeland’s new branches under the Consent Order be located in Ocean County due to widespread branch closures in the area.


For photos of today’s press conference, click here.



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