Judge rejects DOJ’s attempt to drop Lakeland redlining order

Dive Brief:

A federal judge Friday denied the Justice Department’s move to terminate a 2022 redlining consent order against New Jersey’s Lakeland Bank, according to court documents.
Judge Claire Cecchi of the U.S. District Court for the District of New Jersey said neither the DOJ nor Lakeland offered sufficient evidence to meet the bar to end the consent order early. “A promise to reach substantial compliance in the future is not substantial compliance,” Cecchi wrote in an opinion.
The DOJ said Lakeland is committed to fair lending compliance, spending all of an established loan fund and the bank’s advertising, community outreach and consumer education activities stipulated under the consent order.

Dive Insight:

In May 2025, the DOJ sought to terminate a redlining consent order against Lakeland more than two years ahead of schedule.

Lakeland agreed to pay $13 million to settle redlining allegations in 2022 and entered into a five-year consent order set to dissolve in September 2027. The bank was ordered to invest $12 million in a loan fund for Black and Hispanic residents; spend $750,000 on advertising, outreach and consumer education; and dole out $400,000 to develop community partnerships geared toward increasing minority access to residential mortgage credit.

Lakeland was then acquired by Provident Financial Services in 2024, with Provident assuming responsibility for the consent order’s requirements.

A Provident spokesperson said Tuesday the lender “remain[s] committed to fulfilling the terms of the original consent order with the Department of Justice.”

The DOJ didn’t immediately respond to a request for comment.

In seeking to end the consent order early, the Justice Department told the court the bank “has demonstrated a commitment to remediation and has reached substantial compliance with the monetary and injunctive terms of the Consent Order.”

The judge, however, said “Lakeland’s existing compliance – at least on the current record – does not present a change in condition that can justify termination of the consent order.”

Cecchi highlighted annual obligations over the five-year term of the order, and that the actions were intended to collectively remedy the harms identified in the settlement.

That includes requirements to spend $150,000 annually on advertising, outreach, consumer financial education and credit counseling in the Newark area; provide a certain number of outreach programs per year for real estate agents and developers in majority-Black and Hispanic areas to inform them of Lakeland’s products and services; and offer a specific number of seminars per year for residents in majority-Black and Hispanic areas in Newark addressing credit counseling and financial literacy, the judge noted.

With more than a year left in the order’s five-year term, “the presence of these existing obligations under the consent order show that what remains of the consent order is not ‘minor or trivial,’” Cecchi wrote.

Three fair housing groups – New Jersey Citizen Action Education Fund, Housing Equality Center of Pennsylvania, and National Fair Housing Alliance – also opposed the effort to end the consent order early.

Of the $12 million loan fund established, about 65% has been disbursed, meaning the bank must still disburse the remaining 35% – about $4.2 million – which the judge deemed a non-trivial amount.

The order also required Lakeland to open two branches in the Newark area, which the DOJ said the bank has done, but Cecchi pointed to the specification that they be maintained for the entirety of the consent order.

The bank argued that the “continued maintenance” of the consent order exposes it to reputational harm and imposes “ongoing and unnecessary supervisory, financial, and operational burdens.”

Cecchi, though, said Lakeland, at the time, agreed to the consent order terms as being consistent with its business interests, and while the order poses burdens, it also benefits Lakeland by resolving claims against it.

“A promise to comply, given the circumstances here, does not ‘achieve [the consent order’s] purpose’ to the same degree as maintaining Lakeland’s compliance via the consent decree,” Cecchi wrote.