A New Jersey federal judge has declined to sign off on the conclusion of a $13 million redlining deal between Lakeland Bank and the U.S. Department of Justice, ruling that the bank's existing compliance with the deal does not justify its early termination.

U.S. District Judge Claire C. Cecchi on Friday denied the federal government's bid to terminate its 2022 consent order with Lakeland Bank that resolved allegations that the bank discriminated against Black and other minority borrowers in the Newark area, ruling that the government and the bank did not provide enough evidence to meet the burden for the early termination of a consent decree.

Judge Cecchi noted in her decision that Lakeland has distributed only about 65% of the $12 million loan subsidy fund for residents established under the deal and that the consent order required a number of provisions — such as spending $150,000 on marketing and outreach — to be completed each year of the deal's five-year term.

The federal government argued that Lakeland is committed to fair lending compliance, that it would spend all the required amounts related to the loan subsidy fund and meet all of its other financial commitments under the deal.

"But a promise to reach substantial compliance in the future is not substantial compliance," the judge said. "Lakeland's commitment to fair lending compliance going forward does not change the fact that Lakeland has yet to substantially perform its obligations under the consent order."

The two parties moved to terminate the consent order in May of last year, arguing that Lakeland had substantially complied and that the continued maintenance of the deal harms Lakeland's reputation.

The bid was challenged in June 2025 by three fair housing groups, which argued that the Trump administration's effort to terminate the order shows its lack of concern for holding banks accountable for discriminatory redlining practices.

The DOJ accused Lakeland in 2022 of violating the Fair Housing Act and the Equal Credit Opportunity Act by failing to provide home loans and other mortgage services in majority-Black and Hispanic neighborhoods. The bank and the DOJ filed a proposed consent decree alongside the suit, which was entered the next day.

The settlement was reached one day after Lakeland entered an agreement to be acquired by Provident Financial Services Inc. in an all-stock deal valued at $1.3 billion.

New Jersey Citizen Action Education Fund, one of the groups that challenged the bid to end the consent order, praised the ruling in a statement on Monday that called the government's bid "unconscionable."

"The district court's decision is especially significant at a time when the Trump administration has sought to weaken the Community Reinvestment Act, reduce fair lending enforcement and retreat from the federal government's historic role in combatting housing and lending discrimination," said NJCAEF Executive Director Dena Mottola Jaborska.

A Provident Bank spokesperson said in a statement to Law360 on Monday that it remained committed to fulfilling the terms of the original consent order. A representative for the DOJ did not immediately respond to a request for comment Monday.

The U.S. government is represented by Jennifer Slagle Peck of the U.S. Department of Justice.

Lakeland is represented by Jehan A. Patterson of Covington & Burling LLP.

Amici curiae New Jersey Citizen Action Education Fund, Housing Equality Center of Pennsylvania and National Fair Housing Alliance are represented by Eli Segal of Stapleton Segal Cochran LLC and Benjamin David Geffen of the Public Interest Law Center.

The case is U.S. v. Lakeland Bank, case number 2:22-cv-05746, in the U.S. District Court for the District of New Jersey.

--Additional reporting by Katryna Perera and Sydney Price. Editing by Rich Mills.