A federal judge on Friday rebuffed an effort to lift federal oversight of a bank accused of systematically avoiding Black and Hispanic neighborhoods in and around Newark, ruling that the financial institution has not yet met the requirements of a court-ordered settlement tied to alleged discriminatory lending practices.
Oversight to continue through September 2027
U.S. District Judge Claire C. Cecchi denied the Trump administration’s request to terminate a five-year consent decree that Lakeland Bank agreed to in 2022 to resolve claims of redlining. The decree remains in force until September 2027, as written.
Cecchi pointed to outstanding obligations the bank still must fulfill, including a substantial financing commitment. The consent decree requires Lakeland to establish a $12 million subsidy fund aimed at customers seeking home mortgages, home improvement loans and refinances; court filings show the bank still had not disbursed more than $4 million of that fund.
“A promise to reach substantial compliance in the future is not substantial compliance,” Cecchi wrote.
The judge’s language underlined that past steps or assurances were insufficient absent completion of key financial and operational benchmarks spelled out in the settlement.
Merger, DOJ reversal and the bid to end oversight
Lakeland merged with Provident Financial Services in 2024. Provident’s spokesman, Keith A. Buscio, said the company remains committed to meeting the original consent order’s terms.
The request to end court oversight came after a shift at the Justice Department. The 2022 consent decree was secured while Philip Sellinger served as U.S. attorney in New Jersey, but following President Trump’s return to office the department undertook a review of prior consent orders tied to so-called “disparate impact” enforcement. That review prompted department officials to seek termination of oversight in multiple bank redlining cases, including Lakeland and ESSA Bank.
What the decision means locally
For Newark residents and advocates, the ruling keeps in place a legal framework designed to force concrete remedies and investments where regulators said banks had historically under-banked communities of color. Continued oversight preserves judicial monitoring of the bank’s required actions — from capital disbursements to possible branch-opening commitments or other measures the consent decree may require.
Legal observers and community leaders have long argued that consent decrees are among the few tools that can compel financial institutions to reverse long-standing patterns of disinvestment. By rejecting the government’s request to end the decree, Cecchi ensured the bank remains accountable to those timelines and benchmarks — at least on paper — through next year.
- Consent decree remains in effect until September 2027.
- Bank required to create a $12 million subsidy fund; more than $4 million remains undisbursed.
- Lakeland merged with Provident Financial Services in 2024; Provident says it will comply with the order.
| Year | Event |
|---|---|
| 2022 | Consent decree with Lakeland Bank secured by DOJ |
| 2024 | Lakeland merged with Provident Financial Services |
| 2026 | Judge Cecchi denies request to terminate consent decree; oversight continues through Sept. 2027 |
While the ruling does not add new penalties, it preserves judicial control that can enforce disbursements and other conditions in the decree. Judge Cecchi emphasized that unfulfilled, "sizeable" obligations remained when she rejected the motion to end supervision.
Provident’s statement through spokesman Keith A. Buscio pledges continued cooperation with the consent order, but the unanswered question for Newark residents is whether the remaining disbursements and any required community investments will materialize quickly enough to address disparities in home lending and branch access.
The case also illustrates how national policy shifts at the Justice Department can ripple into local enforcement. The department’s recent moves to reassess consent decrees tied to disparate-impact claims prompted the attempt to lift oversight — a bid now halted by the federal judge’s decision.
For now, the court retains a supervisory role, and affected communities in Newark will watch the bank’s next steps closely as the consent decree’s deadlines approach.
