Advocacy groups including New Jersey Citizen Action joined Newark Mayor Ras Baraka Tuesday in asking the Federal Reserve to require a Community Reinvestment Act agreement as a condition of a merger of Lakeland Bank with Provident Bank.
In September 2022, the U.S. Department of Justice entered into a historic $13 million Consent Order with Lakeland Bank for engaging in a pattern or practice of lending discrimination by redlining in the Newark metropolitan area. Under the Consent Order, Lakeland Bank has to open two new locations, one in Newark. Redlining is a discriminatory practice of denying someone a loan or other financial service because they live in a neighborhood considered a high financial risk.
Provident Bank in a statement to NJ Spotlight News, said it “agreed to assume all of Lakeland Bank’s obligations under the DOJ Consent Order” and “ will continue to adhere to all elements of the DOJ Consent Order.”
In its filing with the justice department, New Jersey Citizen Action noted that Newark has long been subject to predatory lending practices, redlining and price gouging, which have contributed to generational poverty.
“That’s why we stand with NJ Citizen Action in asking the Federal Reserve before they sanction this agreement, sanction this merger, that they should enforce what the consent order said by the Department of Justice,” Baraka said.
