Lakeland Bank will pay a $13 million settlement after alleged discriminatory practices that negatively impacted Black and Hispanic borrowers looking for homes in New Jersey.

“Lakeland avoided serving the credit needs of borrowers in majority Black and Hispanic census tracts in the Newark (area) and discouraged borrowers in majority Black and Hispanic census tracts in the Newark (area) from obtaining mortgage loans, while acting to serve the credit needs for mortgage loans in majority-white census tracts,” the U.S. Attorney’s Office for New Jersey said in a consent order, according to

The redlining began in 2005 and was until 2021.

In comparison to other banking institutions, Lakeland Bank had five times fewer applications from Blacks and Hispanics, according to U.S. Attorney for New Jersey Phillip Sellinger.

“If you lived in a Black or Hispanic neighborhood you likely had little opportunity to apply for let alone obtain a loan from Lakeland bank,” Sellinger said, according to “This form of discrimination has been barred by law for decades but still exits today. There were qualified buyers — Lakeland just didn’t service them.”

Lakeland Bank has 40 branch locations across Essex, Somerset, and Union counties, most of which are in predominately white neighborhoods.

“The avoidance went beyond brick and mortar locations,” Sellinger said, according to “Lakeland unlawfully avoided serving neighborhoods that were Black or Hispanic while serving nearby white majority suburbs.”

For these reasons, Newfoundland-based Lakeland has agreed to pay the $13 million to settle concerns about their alleged practices. The funds will be used to invest at least $12 million in a loan subsidy fund that will work to scale credit for home mortgage loans, and increase improvement and home refinance loans for Black and Hispanic communities.

In addition, the bank will open two new locations in Black and Hispanic neighborhoods including one branch that will be opening in Newark.

The Lakeland Bank must also allocate $750,000 for advertising and $400,000 for local partnerships to ensure customers will have greater accessibility to residential mortgage credit.

The banking institution also plans to commit to educating consumers so they can make more informed decisions to enhance their purchasing power.

“Ending redlining is a critical step in our work to close the widening gaps in wealth between communities of color and others,” said Assistant Attorney General Kristen Clarke of the U.S. Justice Department’s Civil Rights Division. “This settlement demonstrates our firm commitment to combating modern day redlining and holding banks and other lenders accountable when they deny people of color equal access to lending opportunities.”