The former Republic Bank, once a major presence in South Jersey, discriminated in its home loan business “based on race and national origin,” according to a state report.

The bank, which has 20 branches and mortgage centers in New Jersey, “has consistently avoided making home loans in predominantly Black, Hispanic and Asian neighborhoods,” the New Jersey Attorney General’s Office said in a statement . the results of a multi-year survey.

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

“Homeownership is one of the most important ways New Jerseyans build wealth,” said Sundeep Iyer, director of the state’s Division of Civil Rights. “But decades of mortgage overhaul and discrimination have deprived communities of color of an equal opportunity to build wealth through homeownership.”

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Republic emphasized 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 an example, the report notes that Republic between 2018 and 2022 “generated very few applications from the City of Camden or other census tracts with large concentrations of Black and Hispanic residents.”

The report also states that Republic:

● Failed to take corrective action as the magnitude of the redline worsened: “In fact, the share of Republic’s applications from black applicants declined from 5.5 percent 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 population greater than 75 percent white, the report noted. “Only two – the Clementon and Sicklerville branches – were in areas where the white population was between 50 and 75 percent.”

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

● Did not conduct “meaningful advertising” in minority areas.

The state report does not address the Philadelphia-based bank’s operations in Pennsylvania and New York.

Republic entered the residential mortgage business in 2016 with the purchase of Oak Mortgage in Evesham. It has granted real estate loans until 2023.

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

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

The report also suggests that Republic “engaged in racially biasing non-white and low-income applicants toward more expensive loan products, such as Federal Housing Administration loans, instead of conventional loan products” .

Regulators shut down the Republic in April due to his precarious finances.

As a result, the Civil Rights Division is seeking compensation for affected New Jersey residents from the receiver of the bankrupt bank, the Federal Deposit Insurance Corp.

The Civil Rights Division shared its findings with Fulton Bank, a Pennsylvania-based institution that acquired the Republic network after its collapse.

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

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

He said “transitioning Old Republic assets and team members to our operating model is the best course of action to ensure the American Dream is achievable for all customers, in New Jersey and throughout our five states.”

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

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