By Brenda Flanagan
Correspondent
It’s a devastating form of discrimination designed to keep minorities corralled, and the Justice Department charges that Hudson City Bancorp did it routinely in New York, Connecticut and New Jersey. They claim the bank redlined Hispanics and African Americans by refusing to offer them affordable mortgages, even avoided building bank branches in minority neighborhoods.
“Yeah, redlining. I think that’s what it is. It’s called your zip codes, really. You live in the wrong zip code — that’s it,” said Newark resident Harriet Davis. When asked what she thought about it, she said, “First of all it’s illegal”
“That’s sad. Maybe they’ll change their mind,hopefully. Everybody needs a home,” said Donna Reed.
“This is a bank that’s been thumbing its nose at the low and moderate income minority community for years,” said Activist Phyllis Salowe-Kaye
Salowe-Kaye’s got thick files of NJ Citizen Action’s disputes with Hudson City Bank that go back to 1997, and says she’s forwarded multiple complaints to the Consumer Financial Protection Bureau over Hudson City’s unwillingness to offer loans and mortgages for minorities.
“They just said, ‘Our doors are open. If they want to come in and get loans, we’re here.’ But the facts show — and the facts have been showing for many, many years — that they have no ability to make these loans,” said said.
Regulators noted that between 2009 and 2013, Hudson City avoided locating branches in areas with large African-American and
Hispanic populations and excluded these groups from marketing strategies. If the US district court approves the $33 million settlement, Hudson City will pay $25 million in direct loan subsidies to qualified borrowers in affected communities, plus another $2.25 million toward community programs and outreach, plus a $5.5 million penalty.
“The inability to build wealth within those communities that were denied access is probably greater than $33 million, but it’s a significant amount of money that is going to be reintroduced into our communities,” said Analilia Mejia, Executive Director for NJ Working Families Alliance.
Hudson City neither admitted nor denied wrongdoing, noting it “disagrees with the statistical analysis of loans relied upon
by the Department of Justice and Consumer Finance Protection Bureau…as well as the agencies’ conclusions from their investigations,” and says it settled to avoid extended litigation that threatens a pending merger.
Hudson City’s possibly looking at some even bigger changes. It could be bought out by M&T Bank of Buffalo if federal regulators approve the deal. M&T already writes mortgages in New Jersey and it would be bound by the agreement with the Department of Justice.