Provident Financial Services has entered a $1.3 billion deal to buy Lakeland Bancorp, which disclosed an ongoing fair lending investigation by the U.S. Justice Department.
Provident Financial Services in Iselin, New Jersey, is pursuing a $1.3 billion deal for a rival, Lakeland Bancorp, despite concerns over commercial real estate concentrations and an ongoing fair-lending investigation of Lakeland by the U.S. Department of Justice.
Lakeland disclosed the existence of the Justice Department investigation Tuesday in an 8-K Current Report filed with the Securities and Exchange Commission. Lakeland said it has “cooperated fully” and is in settlement talks. The company added that it “expects such settlement to be generally comparable to other recent DOJ fair lending settlements.”
The $10.4 billion-asset Lakeland, of Oak Ridge, New Jersey, said it could be asked to strengthen policies, procedures and training, boost community outreach and establish a mortgage subsidy fund as part of a potential resolution.
The Justice Department had not responded to a request for comment at deadline.
William Michael Cunningham, an economist and the CEO of Creative Investment Research in Washington, D.C., was more critical. The settlement Lakeland expects, he said, is “really just a fine.”
“That’s the issue with fair-lending laws,” Cunningham said. “They don’t impact a bank’s operation in the least.”