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Redline Charges Levied Against NY Area Bank

Friday, September 25, 2015

A large northeast savings bank has been named in a consent order filed by the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) for alleged redlining.  Hudson City Savings Bank, a federally-chartered savings association with 135 branches and assets of $35.4 billion is accused of lending practices that denied residents in majority Bank and Hispanic neighborhoods in New York New Jersey, Connecticut, and Pennsylvania fair access to mortgage loans. 

The order charges that Hudson City located branches and loan officers, selected mortgage brokers, and marketed products to avoid and thereby discourage prospective borrowers in minority communities.  If approved by the court, the order will require Hudson City to pay $25 million in direct loan subsidies to qualified borrowers in the affected communities, $2.25 million in community programs and outreach, and a $5.5 million penalty. CFPB says this would be the largest redlining settlement in history to provide such direct subsidies.

 

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