OceanFirst Bank in New Jersey has earned the highest possible Community Reinvestment Act rating less than a year after settling federal charges related to alleged discriminatory lending practices.
The Office of the Comptroller of the Currency gave the bank an "outstanding" rating on its most recent CRA exam, which covered the 2021-2023 period. That was a sharp upgrade from the "needs to improve" rating OceanFirst received for the prior three-year period.
Christopher Maher, chairman and CEO of the bank and its parent company, OceanFirst Financial, told American Banker that the latest CRA rating was the result of "a significant effort" to introduce the bank's lending products in markets it entered via acquisitions between 2015 and 2020.
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"We just had the bad timing that the last CRA exam fell during those acquisitions," Maher said.
OceanFirst's latest CRA rating comes about two years after it received the "needs to improve" rating for the 2018-2020 examination period. Prior to that rating, the $13.3 billion-asset bank received a "satisfactory" grade, a result that followed nine consecutive "outstanding" ratings from the OCC.
In September 2024, OceanFirst
In the OCC's latest exam report, the agency provided several reasons for its improved rating of OceanFirst, saying the bank's lending levels "reflected excellent responsiveness" to credit needs, particularly in the New York City-Newark-Jersey City metropolitan area. The OCC also stated that the bank "exhibited an excellent geographic distribution of loans" in that region, as well as "a good distribution of loans" among individuals with different income levels and among businesses of different sizes.
The report also described OceanFirst as a leader in making community development loans. The OCC's most recent review of OceanFirst and its affiliates did not uncover any discriminatory or other illegal credit practices, according to the exam report.
In last year's settlements, OceanFirst agreed to add at least $14 million to a loan subsidy fund to increase access to home mortgage, home improvement and home refinance loans for residents of majority-Black, Hispanic and Asian neighborhoods in Middlesex, Monmouth and Ocean counties.
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It also agreed to open a loan production office and to spend $700,000 on advertising, outreach, consumer financial education, and credit counseling focused on predominantly Black, Hispanic and Asian neighborhoods in those counties.
Maher said OceanFirst would continue to do "community walk-abouts," in which the bank's senior leadership team meets with community members in disadvantaged neighborhoods to better understand their banking needs. As a result of those walks, the bank has tailored some of its products to meet community needs and hired more employees with multilingual skills, he said.
On Tuesday, New Jersey Citizens Action, a statewide advocacy organization, gave credit to OceanFirst for working to improve its CRA rating. Leila Amirhamzeh, the group's director of community reinvestment, said in an email that "it is clear … that OceanFirst Bank has been actively reaching out to and partnering with community-based organizations to better meet the needs of the low- and moderate-income communities in Middlesex, Monmouth and Ocean counties."
Still, the group remains concerned with what Amirhamzeh characterized as "inflation of CRA exam ratings, as performance evaluations don't accurately reflect the granular data we see with regard to underserved communities."
