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Yahoo
6 days ago
- Business
- Yahoo
Feds seek to ditch settlement over alleged redlining with North Jersey bank
The Trump administration is asking a judge to drop a 2022 settlement the Justice Department had reached with North Jersey-based Lakeland Bank — which was later absorbed by Provident Bank — over allegations of redlining against Black and Hispanic customers. While Provident Bank said it will continue to provide low-cost mortgages to underserved communities, the motion by the U.S. Justice Department to abandon the settlement has drawn the ire of community advocates and legal experts, who say it would make it easier for banks to engage in redlining. 'It goes without saying it's a good thing when financial institutions are complying with those consent orders, but when you take away the teeth — the actual enforcement — who's to say that they will continue to comply,' said Leila Amirhamzeh, director of community reinvestment for New Jersey Citizen Action, a consumer advocacy four-page motion by the Justice Department, filed May 28 in U.S. District Court, seeks to terminate the consent order the Biden administration negotiated with what was then Lakeland Bank. In the initial complaint, the Justice Department said Lakeland violated the federal Fair Housing Act and Equal Credit Opportunity Act by deliberately avoiding banking with Black and Hispanic customers, particularly in and around Newark. The discrimination in question allegedly took place between 2015 and 2021, according to the Biden administration. To settle the complaint, Lakeland agreed to pay $12 million to subsidize mortgages, home improvement loans and home refinancing loans for Black and Hispanic residents and open two branches in underserved neighborhoods. Lakeland also had to provide $150,000 a year for advertising, outreach and consumer finance education in the Newark area. Newark Mayor and Democratic gubernatorial candidate Ras Baraka wanted one of those new branches to be in his city, and the Greater Toms River Chamber of Commerce also wanted a branch in its area. According to the Provident Bank website, there are currently four locations in Newark and three in Toms River. After acquiring Lakeland, Provident took ownership of the settlement and the mandate to open two branches in underserved areas of New Jersey. The Justice Department in its motion to terminate the order said Lakeland reached substantial commitment to comply with the consent agreement and it is committed to continuing its disbursement of the loan subsidy. Provident spokesperson Keith Buscio told and the USA TODAY Network New Jersey that the bank remains committed to the loan subsidy initiative. He said Provident is not a party to the litigation and referred other questions to the Justice Department. The Justice Department could not immediately be reached for comment. Baraka's office in Newark said it is planning to hold a press conference about the motion by the Justice Department on June 5. Court filings show two attorneys who helped file the initial complaint against Lakeland, Michael Campion and Susan Millenky, withdrew as counsel from the case. Campion was appointed in 2022 to lead the U.S. Attorney's Office's Civil Rights Division that was created to enforce federal civil rights laws in New Jersey. The Fair Housing Act was passed as part of the Civil Rights Act of 1968 to prohibit landlords and mortgage lenders from discriminating based on race, religion, national origin or sex. Nearly 60 years later, racial wealth disparity remains vast. In New Jersey, the median household wealth of white families is $322,500, compared with $17,700 for Black families and $26,100 for Hispanic families, the New Jersey Institute for Social Justice said. In New Jersey, 77.3% of white residents owned a home in 2020. By comparison, 42.8% of Black residents and 32.7% of Hispanic residents were homeowners, according to the Urban Institute, a research group. Critics said the Justice Department's motion to drop the Lakeland settlement is a step by the Trump administration's bid to reverse diversity, equity and inclusion programs. David Troutt, a professor at Rutgers Law School in Newark, said the motion by the Justice Department to terminate the consent decree is part of a larger campaign by the department to rescind investigations and agreements involving anti-Black racism, while beginning investigations into what it deems 'illegal DEI.' 'The Trump administration's withdrawal from a federal consent decree without justification is an extraordinary act of endorsing racist practices and housing market manipulation,' Troutt said. 'For the very government that successfully enforced those borrowers' civil rights to now repudiate them sends a message unlike any we've seen since the federal government first endorsed redlining in the 1930s,' Troutt said. Lakeland isn't the only New Jersey bank that faced scrutiny under the Biden administration. Toms River-based OceanFirst Financial Corp. agreed to pay $14 million to subsidize mortgages, helping settle a lawsuit that alleged the bank violated federal discrimination laws. Since then, it has improved the rating given by federal bank regulators who oversee investments in underserved communities to 'outstanding.' The Justice Department hasn't filed a motion seeking to terminate the consent order with OceanFirst. But two attorneys who represented the U.S. in the initial complaint, Millenky and Nathan Shulock, have filed motions to withdraw from the case, according to the court docket. A combined 22 Provident and Lakeland branches closed in 2024 following the $1.3 billion merger creating a 'super community bank.' Each branch that closed was within roughly three miles of a nearby branch. Activists and opponents warned that the merger would mean fewer banking services would be available for underserved communities, such as people of color, the elderly and disabled. New Jersey Citizen Action applauded Provident for its continued commitment to the terms of the consent order. But the group said the Justice Department should continue to enforce it. 'When you actually terminate these consent orders, there's no deterrence, and it's basically telling financial institutions that the Department of Justice is going to be taking a hands-off approach to fair lending issues, to redlining,' New Jersey Citizen Action's Amirhamzeh said. Daniel Munoz covers business, consumer affairs, labor and the economy for and The Record. Email: munozd@ Twitter:@danielmunoz100 and Facebook Michael L. Diamond is a business reporter for the Asbury Park Press. He has been writing about the New Jersey economy and health care industry since 1999. He can be reached at mdiamond@ This article originally appeared on Feds seek to drop Lakeland Bank settlement over alleged redlining
Yahoo
28-03-2025
- Business
- Yahoo
North Jersey broker challenges 'outdated' real estate brick-and-mortar office requirements
Signing paper contracts and filling file cabinets with physical records are likely things of the past for most people. And one North Jersey-based broker says the requirement for brick-and-mortar real estate offices should be, too. Derek Eisenberg is the founder of Continental Real Estate Group Inc., a national online brokerage based in Hackensack that offers a la carte real estate services. He is currently in the midst of legal battles against real estate commission officials in the states of Nevada and West Virginia, where he said the rules requiring brokerages to have physical office spaces is "outdated" and simply adds unnecessary costs for his expanding business. "All of our records are electronic," he said. "We don't come into our office to write up a contract. Everything is done with DocuSign or Dotloop or ZipForms online. There's no paperwork done in the office anymore, and basically we never go into these offices." Overall, Eisenberg said, he began focusing on online-first services in 1999 as a result of the dot-com boom. He said his business provides sellers the option to pay for just the services they want at a discounted price, rather than requiring them to work fully with an agent and pay all the typical fees. In what is often referred to as the flat-fee industry, Eisenberg said, the business operates on a model in which clients pay anywhere from about $75 to $245, depending on the services they need, as well as a 0.25% fee at the time of closing. He said the primary clientele is do-it-yourselfers — people who are willing to work with a real estate agent but want to be in more control of the listing, and those looking to sell as "For Sale by Owner," but who need some guidance. "They come to us for the marketing aspect, which is the MLS," he said, referring to the Multiple Listing Service. "Then they can subscribe to as little services as they want. They can get a basic listing with six photographs and just put them in the MLS, or they can get a very detailed level of service where we will negotiate and basically do everything that a local agent would do short of putting the key in the door. "The only thing we won't do is open it for showings or inspections, but we'll get on the phone or email and do whatever a local agent would do as far as negotiating the deal and setting up stuff goes,' Eisenberg said. He said the brokerage's services include selling lawn signs and lockboxes, scheduling open houses, a texting system that notifies owners anytime their lockbox is opened for a showing by an agent, and a telephony platform that forwards calls from potential buyers to the client, among other things. Some states do require more services from real estate agents by law, and he said his business offers them in those states. "It occurred to me that if you charge people less money, you could do less work," he said. "My original plan was just to do it in New Jersey. And then I said: Why don't we try this in Pennsylvania and New York? And it just started growing, and it was scalable. So I just kept taking tests and adding more states." He said that collectively, among him, his wife and two other brokers employed at his Hackensack office, they have real estate licenses in 45 states and Washington, D.C. And by the end of the year, they aim to be licensed in all 50 states. As they expanded, Eisenberg said, they ran into the issue that certain states require brokerages to have a physical address within the state in order to be licensed there. That could mean having just an office suite, having a location that is physically staffed during business hours, or having a general address within the state that brokers can provide, depending on the state. Because most of their services can be offered to sellers remotely — with the exception of a few, based on the regulations of certain states — and the fact that most brokerages now handle transactions electronically, rather than with physical copies, he said these regulations are no longer necessary. Nevada and West Virginia are two states that maintain some version of the presence requirement. Eisenberg said he currently pays rent in seven states overall for unused office space under this type of regulation, and he decided to file lawsuits against those two to see if this is a change he's able to make in today's digital-first world. As of the end of March, Eisenberg said, they had submitted an opposition to a motion to dismiss from officials in Nevada and are waiting for a response. In West Virginia, he said, they agreed to stay the case because House Bill 2010, if passed, would change the requirement for a brick-and-mortar office. "We keep coming up against all kinds of regulations, and we do whatever it takes to legally get around them, but there isn't anything we can do about the office requirement," he said. "We're going to file in the other states that require this, as well, but first we want to see how we do in these two states." Maddie McGay is the real estate reporter for and The Record, covering all things worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay, on X @maddiemcgayy, and sign up for her North Jersey Living newsletter. Do you have a tip, trend or terrific house she should know about? Email her at MMcGay@ This article originally appeared on Hackensack broker challenges real estate brick-and-mortar office rule
