The complaint, which arose from a referral by OceanFirst's regulator at the Office of the Comptroller of the Currency, alleged it restricted access to credit and mortgage lending services in majority Black, Hispanic and Asian neighborhoods in New Brunswick, approximately 50 miles away from the bank's headquarters.

"This settlement, and the over $137 million in relief the Justice Department has secured for communities across the country, will help to ensure that future generations of Americans inherit a legacy of homeownership that they have been too often denied," said Attorney General Merrick Garland. 

"Redlining is unlawful, it is harmful, and it is wrong. The Justice Department will continue to hold banks and mortgage companies accountable for redlining and to secure relief for the communities that continue to be harmed by these discriminatory practices."

Among the most notable redlining cases being pursued by a federal agency right now is a charge against nonbank Townstone Mortgage, currently facing off against the Consumer Financial Protection Bureau.

OceanFirst's own press release noted its settlement is one of approximately a dozen agreements that the Justice Department entered into with mortgage lenders since 2021. Those agreements resulted in over $120 million in investments in mortgage-lending subsidies, financial education and outreach.

The bank explained it began serving New Brunswick after the 2018 acquisition of Sun National Bank, but that institution had discontinued consumer lending operations years earlier. OceanFirst was working to reestablish its presence.

"The commitments we are announcing today are consistent with our bank's 122-year history of providing credit and other financial services to all residents of the communities we serve," said Christopher Maher, chairman and CEO, of OceanFirst. "We look forward to continuing the bank's efforts in the New Brunswick-Lakewood market to help meet the lending and banking needs of families, businesses, schools and organizations."

However, the HUD press release pointed out that the bank acquired and closed branches and loan production offices, which, coupled with insufficient marketing efforts and fair lending policies, led to OceanFirst failing to serve those neighborhoods' needs.

As part of the agreement, OceanFirst promised to maintain a branch it opened in the area in December 2023, as well as establish a loan production office.

"The LPO will include a community room to accommodate financial education classes that OceanFirst will make available to the public and to community organizations and include an ATM that will not charge fees to OceanFirst's customers and maintain lower fees for non-customers than what is available at nearby ATMs," the HUD press release said.

OceanFirst agreed to hire at least two full-time loan officers to solicit mortgage applications in majority-minority neighborhoods in the New Brunswick area.

The largest portion of the financial commitment was a subsidy fund of at least $14 million in line with the goal of increasing access to credit for mortgages, home improvement loans and refinances in the allegedly redlined areas.

"Redlining is not only illegal, but it unfairly closes doors of economic opportunity for thousands of families of color in this country," said HUD Acting Secretary Adrianne Todman. "Today's announcement underscores our shared commitment to achieving justice and creating equitable opportunities for Americans, particularly those who have historically been denied access."

The deal also calls for OceanFirst to invest $400,000 in community partnerships and spend $140,000 per year (up to $700,000 total for the five-year term of the agreement) in targeted marketing, advertising and outreach.

In both the conciliation agreement with HUD as well as the judicial settlement with DOJ, OceanFirst neither admitted to nor denied the claims. HUD said it did not issue any findings against OceanFirst in this case.