In 2022, the U.S. Department of Justice, under then-President Joe Biden, entered into a court-ordered agreement with Lakeland Bank to halt redlining in Black and Latino neighborhoods in Newark and compensate for the discriminatory lending practice with $12 million in mortgage subsidies and the establishment of a new branch in the city.
Since then, citizen watchdogs and the department’s Civil Rights Division say the terms of the 5-year binding agreement — known as a consent decree or order — have been honored by Newfoundland-based Lakeland and by Provident Bank of Jersey City, which completed an acquisition of Lakeland in May 2024.
Now, under President Donald Trump, the Civil Rights Division is asking the federal judge who approved the original agreement to terminate it. The request has prompted objections from the same watchdogs at New Jersey Citizen Action and from Newark Mayor Ras Baraka, who say terminating the decree would make compliance voluntary and jeopardize the gains achieved under what has been a binding order.
“It was satisfying to see the consent decree restitution in progress until the Department of Justice recently moved to terminate it,” Baraka said in a statement on Wednesday. “I condemn this act as a betrayal of the people who were harmed and of decency itself. I call on the Department of Justice to halt this termination.”
The Justice Department did not respond to a request for comment on Wednesday.
A Provident spokesman, Keith Buscio, issued a statement quoting the motion’s assertion that the company had “demonstrated a commitment to remediation” and had “reached substantial compliance” with the terms of the consent order.
The statement added that “Provident acknowledges the benefit of the mortgage loan subsidy to underserved communities and, in the event the DOJ’s motion is granted, will commit to spending the remaining amount under the subsidy.”
Redlining is the historical practice of denying mortgage applications for homes in certain neighborhoods, typically where people of color live, regardless of the applicant’s creditworthiness.
Housing advocates say redlining’s legacy in New Jersey’s largest city is evident in its low homeownership rate, with just 24.1% of Newark’s 305,000 residents living in owner-occupied housing compared to 63.7% statewide, according to 2023 Census figures.
Since homeownership is common way Americans build family wealth, redlining is widely regarded as contributing to the dramatic wealth gap between people of color and whites. In his statement, Baraka called redlining “a historical weapon for racist discrimination, outlawed, yet still practiced today.”
The May 28 motion by the Justice Department is one of several clashes between the Republican Trump administration and Baraka, who leads New Jersey’s largest city and is one of six Democrats running for governor in Tuesday’s primary.
Other clashes include Baraka’s May 9 arrest by federal officers outside an immigrant detention center, followed by dismissal of the trespassing charge, which in turn led to his malicious prosecution suit against the acting U.S. attorney for New Jersey.
Newark is also among four “sanctuary cities” being sued by the Trump Justice Department for what it calls interference in its immigration enforcement.
In January, four days after Trump was sworn into this second term, Baraka made Newark an early focus of the national deportation debate by sharply criticizing an ICE raid on a local seafood outlet.
The motion to terminate the consent decree was filed in U.S. District Court by a team of lawyers led by Harmeet K. Dhillon, an assistant attorney general in the Civil Rights Division. The case is before Judge Claire C. Cecchi, who approved the consent decree three years ago. A hearing hasn’t been scheduled.
In seeking the decree’s termination, the motion asserts that “Lakeland has demonstrated a commitment to remediation and has reached substantial compliance with the monetary and injunctive terms of the Consent Order.”
The motion refers to “Lakeland,” even though the company was absorbed by Provident and its branches closed or rebranded.
“Lakeland,” the motion adds, “has also committed to continuing its disbursement of the loan subsidy fund and to provide the United States confirmation of that disbursement upon completion.”
The motion does not provide any additional rationale for the consent decree’s termination. But the Lakeland consent decree case is similar to other termination requests made by the Trump Justice Department this spring, tallied in a story by The Washington Post on Sunday.
The requests follow an April 23 executive order by the president titled Restoring Equality of Opportunity and Meritocracy. It bans consent decrees intended to address what is known as a “disparate impact” that a policy or practice has had on a particular racial, ethnic, gender or other group, even if that impact is not the policy’s explicit intent.
The order says its purpose is to encourage “meritocracy and a colorblind society, not race- or sex-based favoritism.” It includes a 90-day deadline within which “all agencies shall evaluate existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability and take appropriate action.”
Another New Jersey lender, OceanFirst Bank, entered into a consent decree last fall after the Justice Department — still under Biden — accused the Toms River-based bank of redlining mostly Black and Latino census tracts in Ocean, Monmouth, and Middlesex counties. Citizen Action officials suspect the Trump administration will try to kill the Ocean decree next.
The group praised Provident Bank this week for its compliance with the terms of the consent decree, noting that the lender had just satisfied one of its conditions by opening a new branch in Newark, Provident’s fourth in the city.
A lawyer representing Citizen Action, Dan Urevick-Ackelsberg of the nonprofit Public Interest Law Center in Philadelphia, said “there’s no indication” that the Justice Department was seeking to terminate the consent decree at Provident’s request.
Instead, Citizen Action directed its criticism at the government.
“This is yet another example of how the Trump administration has no respect for the law or the needs of low-and moderate-income communities, and in particular the needs of people of color,” Citizen Action’s executive director, Dena Mottola Jaborska, said in a statement.
The group is asking the judge to let it join the case in opposition to the motion, asserting the consent decree has led to real gains for Newark homebuyers that would be jeopardized if its terms were voluntary.
“Lakeland has hired loan officers to solicit applications for the consent order’s loan subsidy fund,” the brief states, listing several of those gains. “Lakeland has conducted advertising and outreach to impacted communities; has partnered with local organizations to provide services promoting affordable housing, wealth creation, and asset preservation; and has started making mortgages through the consent order’s loan subsidy fund.”
But Urevick-Ackelsberg said Provident’s compliance up to now is no guarantee of the future. Circumstances, the leadership of the 185-year-old company, or other factors can change, he said, and with them, the bank’s policies or conduct.
So it’s important, Urevick-Ackelsberg said, that the consent decree remains in place.
“It goes to whether or not Lakeland/Provident has a continued enforceable obligation to help undo the redlining that was alleged,” he said.
Stories by Steve Strunsky
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Steve Strunsky may be reached at sstrunsky@njadvancemedia.com