On July 31, the U.S. District Court for the District of New Jersey denied without prejudice the government’s motion to terminate a consent order and dismiss a redlining case against a bank. As previously covered by InfoBytes, in 2022 the government brought claims under the FHA and ECOA alleging the bank engaged in a pattern or practice of unlawful redlining from 2015 to 2021, including by avoiding home loans and mortgage services in majority-Black and Hispanic neighborhoods and discouraging applicants and prospective applicants from seeking credit.

The court held that neither the government nor the bank provided sufficient evidence to justify early termination because the bank had not substantially performed its obligations under the consent order. The court pointed to ongoing annual outreach and education obligations, a requirement to maintain two branches through late September 2027, and a $12 million loan subsidy fund, of which about 65 percent had been disbursed, leaving about $4.2 million remaining. The court also rejected the bank’s arguments that reputational, supervisory, financial and operational burdens supported termination, finding that the bank had agreed to the obligations and offered no concrete evidence that early termination would serve the public interest.