NJ bank may pay over $32 million for mortgage redlining

The CFPB and the U.S. Department of Justice have announced a joint action against Hudson City Savings Bank (Paramus, NJ) for discriminatory redlining practices that denied residents in majority-Black-and-Hispanic neighborhoods fair access to mortgage loans. The complaint filed by the CFPB and DOJ alleges that Hudson City illegally provided unequal access to credit to neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania. The bank located branches and loan officers, selected mortgage brokers, and marketed products to avoid and thereby discourage prospective borrowers in predominantly Black and Hispanic communities. If the proposed consent order is approved by the court, Hudson City will pay $25 million in direct loan subsidies to qualified borrowers in the affected communities, $2.25 million in community programs and outreach, and a $5.5 million penalty. This represents the largest redlining settlement in history to provide such direct subsidies, according to the CFPB's news release.

For additional information, see BOL's Penalties entry for this enforcement action.

Prepared remarks of CFPB Director Cordray on the Enforcement Action press call.

Maps supporting the CFPB/DOJ complaint against Hudson City Savings