Republic Bank has stopped lending to communities of color.

The former Republic Bank, which once had a large presence in South Jersey, discriminated against “on the basis of race and national origin” in its mortgage lending business, a state report says.

The bank, which has 20 branches and mortgage centers in New Jersey, “systematically avoided issuing mortgages in majority-Black, Hispanic and Asian neighborhoods,” the New Jersey Attorney General’s Office said in announcing the results of a years-long investigation.

Republic also “failed to originate mortgages in these areas due to its unlawful practices,” the agency said in a statement.

“Home ownership is one of the most important ways New Jerseyans create wealth,” said Sandeep Iyer, director of the state Division of Civil Rights. “But decades of mortgage restrictions and discrimination have denied communities of color an equal chance to build wealth through homeownership. “

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According to the report, Republic singled out minority communities in Atlantic, Burlington, Camden, Cape May and Gloucester counties “even though it engaged in significant lending in nearby predominantly white neighborhoods.”

As an example, the report notes that between 2018 and 2022, Republic “filed very few applications from the city of Camden or other census tracts with large concentrations of black and Hispanic people.”

The report also states that the Republic:

● Failure to take corrective action as redlining worsened: “In fact, the share of Republic applications coming from black applicants fell from 5.5% in 2018 to 3.7% in 2022.”

● Established branches in predominantly white areas and had none in predominantly minority areas. The bank had 16 branches in census tracts where the population was more than 75% white, the report noted. “Only two—the Clementon and Sicklerville branches—were in areas where the population was between 50 and 75 percent white.”

● Lending restrictions for white and high-income borrowers were repeatedly eased, while the rate of such exceptions was “significantly lower” for minority applicants.

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

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

Republic entered the home mortgage business in 2016 with the purchase of Evesham-based Oak Mortgage. It issued mortgage loans until 2023.

Between 2018 and 2022, just 6% of Republic mortgages were issued to residents of predominantly Black, Asian or Latino neighborhoods.

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

The report also said that Republic “has been racially targeting non-white and low-income applicants for higher-cost loan products, such as Federal Housing Administration loans, instead of conventional loan products.”

Regulators shut down the republic in April due to its precarious financial position.

As a result, the Civil Rights Division is seeking compensation for injured New Jersey residents from the failed bank’s receiver, the Federal Deposit Insurance Corporation.

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

“The state will monitor the implementation of Fulton’s mortgages to ensure that the previous Republican practice of limiting loans does not continue,” it said.

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

It states that “converting former 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 all five states where we operate.”

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

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