NJ Investigation Finds Republic First Bank Guilty of Discriminatory Lending Practices

New Jersey Attorney General Matthew Platkin revealed findings on Tuesday, October 29th, from a multi-year investigation into Republic First Bank, uncovering discriminatory mortgage practices that violated the New Jersey Law Against Discrimination. Conducted in collaboration with the Division on Civil Rights and Division of Law, the investigation found that Republic First Bank engaged in mortgage redlining, a practice of excluding Black, Hispanic, and Asian communities from lending opportunities. The bank, based in Philadelphia, neglected applicants of color across multiple New Jersey counties, notably Atlantic, Burlington, Camden, Cape May, and Gloucester.

The report highlighted that Republic First Bank consistently approved fewer loans in neighborhoods with a higher concentration of people of color. Analysis showed that the bank’s lending rates to Black borrowers were less than half those of its peers, and loan approvals for Hispanic and Asian borrowers were three times lower than those seen at comparable institutions. This exclusionary pattern left communities of color without equal access to mortgage loans, limiting their ability to build wealth through homeownership. 

Further investigation disclosed that Republic First Bank concentrated most of its branches in predominantly white areas and neglected to advertise in communities of color. Additionally, bank policy reportedly favored high-income and white applicants by providing policy exceptions, while minority applicants were often denied under similar conditions. This disparity worsened over recent years despite the bank’s awareness of its underperformance in serving diverse communities.

In April 2024, amid declining deposits and a devalued mortgage portfolio, Republic First Bank was closed by the Pennsylvania Department of Banking and Securities, with the Federal Deposit Insurance Corporation (FDIC) taking over its assets. New Jersey officials have since filed a claim with the FDIC, seeking financial compensation for affected residents subjected to the bank’s discriminatory practices between 2018 and 2022. 

Sundeep Iyer, Director of the Division on Civil Rights, commented on the importance of the findings, stating, “Mortgage redlining and discrimination have denied communities of color an equal chance to build wealth. Our investigation shows that redlining is not merely a thing of the past, and we will continue to hold discriminatory lenders accountable.” New Jersey’s action reinforces its commitment to combating housing discrimination and ensuring equitable access to homeownership for all its residents.