The former Republic Bank, once a major presence in South Jersey, discriminated in its home loan business “on the basis of race and national origin,” a state report says.

The bank, with 20 branches and mortgage centers in New Jersey, “systematically avoided making home loans in majority black, Hispanic and Asian neighborhoods,” the New Jersey Attorney General’s Office said. the results of a multi-year investigation.

Republic also “failed to obtain home loans in those neighborhoods due to its illegal practices,” the agency said in a statement.

“Home ownership is one of the most essential ways New Jerseyans build wealth,” said Sundeep Iyer, director of the state Division of Civil Rights. “But decades of foreclosures and discrimination have denied communities of color equal opportunities to build wealth through home ownership. .”

Money laundering is supposed to: TD Bank faces huge penalty after investigation

Republic red-flagged minority communities in Atlantic, Burlington, Camden, Cape May and Gloucester counties, “even as it engaged in significant lending in nearby predominantly white neighborhoods,” according to the report.

As one example, the report noted that the Republic between 2018 and 2022 “generated very few applications from the City of Camden or other census tracts with high concentrations of black and Hispanic residents.”

The report also said the Republic:

● We did not take corrective action as the extent of the redline worsened: “In fact, the share of the Republic’s applications that came from applicants of color fell from 5.5% in 2018 to 3.7% in 2022.”

● Built its branches in predominantly white areas and had none in majority-minority neighborhoods. The bank had 16 branches in census tracts with a white population of more than 75 percent, the report notes. “Only two—the Clementon and Sicklerville branches—were in areas where the white population was between 50 and 75 percent.

● Repeatedly reduced loan restrictions for white and high-income borrowers, while the rate of these exceptions was “significantly lower” for minority applicants.

● Did not “significantly advertise” in minority areas.

The state report did not address the Pennsylvania and New York operations for the Philadelphia bank.

Republic entered the residential mortgage business in 2016 with the acquisition of Evesham-based Oak Mortgage. It generated housing loans until 2023.

Only 6% of the Republic’s home loans went to residents in majority black, black, Asian or Hispanic neighborhoods between 2018 and 2022.

In contrast, other similarly sized lenders “were more than three times as likely to make loans to residents of these neighborhoods.”

The report also suggests that Republic “engaged in racially targeting non-white and low-income applicants to higher-cost loan products, such as Federal Housing Administration loans, instead of conventional loan products.”

Regulators shut down Republic in April due to its shaky finances.

As a result, the civil rights division is seeking compensation for affected New Jersey residents from the failed bank’s receiver, the Federal Deposit Insurance Corp.

The Civil Rights Division shared its findings with Fulton Bank, a Pennsylvania institution that purchased the Republic chain after it collapsed.

“The state will monitor Fulton’s mortgage loan performance to ensure that Republic’s past redlining practices do not continue,” the statement said.

In a statement, Fulton Bank said it has “a long history of supporting all communities, including majority minority neighborhoods.”

It said “the transition of former Republic assets and team members to our operating model is the best course of action to ensure the American Dream is achieved for all customers, in New Jersey and across our five-state footprint.”

Jim Walsh is a senior reporter at the Courier-Post, Burlington County Times and The Daily Journal. Email: [email protected].

This article originally appeared in the Cherry Hill Courier-Post: Has Republic Bank engaged in redlining? The New Jersey report says yes