Requires Department of Banking and Insurance to examine and rate lending institutions with regards to lending, investments, and services provided to low- and moderate-income consumers.

A4797

ASSEMBLY, No. 4797

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 23, 2026

Sponsored by:

Assemblywoman� VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

Assemblywoman� LINDA S. CARTER

District 22 (Somerset and Union)

Assemblywoman� KATIE BRENNAN

District 32 (Hudson)

SYNOPSIS

���� Requires Department of Banking and Insurance to
examine and rate lending institutions with regards to lending, investments, and
services provided to low- and moderate-income consumers.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning community reinvestment and
supplementing Title 17 of the Revised Statutes and repealing P.L.1991, c.294.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

����
1.
��� The Legislature finds and declares that:

���� a.���� Regulated
financial institutions are required by law to demonstrate that they serve the
convenience and needs of the communities in which they are chartered to do business.

���� b.��� The
convenience and needs of communities include the need for credit, deposit
services, and other financial products.

���� c.���� Regulated
financial institutions have a continuing and affirmative obligation to serve
community needs.

���� d.��� It
is the purpose of this act to require the appropriate State financial
supervisory agency to use its authority when examining financial institutions
and to encourage the institutions to help meet the financial needs of the local
communities in which they are chartered consistent with the safe and sound
operation of the institutions.

����
2.��� As
used in this act:

����
�Application
for a deposit facility or license" means an application to the Department
of Banking and Insurance for:

���� (1)�� a
charter for a State-chartered bank or savings and loan association or credit
union;

���� (2)�� the
establishment of a domestic branch or other facility with the ability to accept
deposits for a regulated financial institution;

���� (3)�� the
relocation of the home office or a branch office of a regulated financial
institution;

���� (4)�� the
merger or consolidation with, or the acquisition of the assets, or the
assumption of the liabilities of a regulated financial institution requiring
approval;

���� (5)�� the
acquisition of shares in, or the assets of, a regulated financial institution
requiring approval under State law; or

���� (6)�� a
license, or renewal of a license, to make loans or offer other financial
services.

���� �Assessment
area� means each community, including a State, metropolitan area, or urban or
rural county, in which the institution:

���� (1)�� maintains
deposit-taking branches, automated teller machines, or retail offices;

���� (2)�� is
represented by an agent;

���� (3)�� for
areas lacking deposit-taking branches, automated teller machines, retail
offices or agents, where a regulated financial institution issues a significant
number of loans or other products, including deposits, relative to the total
number of loans or other products made by the institution or relative to the
total number of loans or other products offered by the private sector market;
and

���� (4)�� has
the common bond or field of membership for a credit union.

���� �Community
benefits plan� means a plan that provides measurable goals for future amounts
of safe and sound loans, investments, financial services, and other products
for low- and moderate-income communities and other distressed or underserved
communities.

���� �Community
development� includes:

���� (1)�� affordable
housing for low- or moderate-income individuals and avoidance of patterns of
lending resulting in the loss of affordable housing units;

���� (2)�� community
development services, including counseling and successful mortgage or loan
modifications of delinquent loans;

���� (3)�� activities
that promote integration;

���� (4)�� activities
that promote economic development by financing small businesses or farms that
meet the size eligibility requirements of the development company or small
business investment company programs pursuant to 13 C.F.R. s.121.301, or any
successor regulation, with an emphasis on small businesses that have gross
annual revenues of not more than $1 million;

���� (5)�� activities
that revitalize or stabilize:

���� (a)�� low-
or moderate-income geographies;

���� (b)�� designated
disaster areas;

����
(c)�� other distressed or underserved communities;

���� (d)�� communities
consisting disproportionately of other underserved populations;
or

���� (e)
distressed or underserved nonmetropolitan middle-income geographies or other
geographies designated by the Federal Financial Institutions Examination
Council, based on:

���� (i)��� rates
of poverty, unemployment, and population loss; or

����
(ii)�� population size, density, and dispersion, if those
activities help to meet essential community needs, including the needs of low-
and moderate-income individuals;

���� (6)�� activities
that promote physical, environmental, and sensory accessibility in housing
stock that is integrated into the community;

���� (7) climate
remediation and resiliency including workforce development related to carbon
pollution-free energy sectors, operational and technical support for
environmental organizations, energy efficiency upgrades, weatherization,
renewable energy such as solar power, flood protection, creation of green
spaces, gardens and tree canopies; and

���� (8) �other
activities that promote the objectives of this act, as determined by the
appropriate federal financial supervisory agencies or the Department of Banking
and Insurance.

���� �Department�
means the Department of Banking and Insurance.

���� �Geography�
means a census tract delineated by the United States Census Bureau in the most
recent decennial census.

���� �Metropolitan
area� means any such area, as defined by the federal Director of the Office of
Management and Budget, and any other area designated as such by the appropriate
department or federal financial supervisory agency.

���� �Other
distressed or underserved community� means an area or census tract that,
according to a periodic review and data analysis by the Department of Banking
and Insurance or a federal financial supervisory agency on an interagency basis
through the Federal Financial Institutions Examination Council, is experiencing
economic hardship or is underserved by financial institutions.� A possible
metric to determine an underserved community may be loans per households or per
small businesses.�

���� �
Other underserved populations� means populations that are
experiencing ongoing effects of discrimination or are relatively underserved by
financial institutions as measured by loans per capita or other similar
metrics.

����
�
Regulated financial institution� means a mortgage company
licensed under State law and the following entities chartered under State law:

���� (1)�
a bank, including affiliates and subsidiaries that offer retail loans;

���� (2)�
a savings bank, including affiliates and subsidiaries that offer retail loans;
and

���� (3)�
a credit union.

���� 3.��� a.�
In connection with its examination of a regulated financial institution, the department
shall:

���� (1)�� assess
the institution's record of meeting the needs of its entire community for
credit, deposit, and other financial products, including low- and
moderate-income consumers and neighborhoods, other distressed or underserved
communities and other underserved populations, consistent with the safe and
sound operation of the institution.� This includes assessment, as appropriate,
of the following activities:

���� (a)�� retail
lending, including home, small business, consumer, and other lending and
financial products, that responds to credit needs, deposit needs, or other
financial needs.� Purchases of loans do not count when an institution purchases
a loan that had been previously purchased by another institution;

���� (b)�� community
development lending and investments, which may also consist of grants to
non-profit organizations engaged in community development;

���� (c)�� retail
financial services, provision of branches and other service facilities,
low-cost deposit accounts and community development services;

���� (d)�� the
record of the institution in offering safe and sound products, using
delinquency rates, default rates and repayment and other data to assess this;
and

���� (e)�� efforts
by the institution to:

���� (i)��� work
with delinquent borrowers to resolve the delinquency including timely loan
modifications;

���� (ii)�� prevent
displacement of low- and moderate-income populations and to promote
integration; and

���� (iii)� serve
underserved populations such as creating special purpose credit programs in
accordance with the federal �Equal Credit Opportunity Act,� as added by section
1071 of the �Dodd-Frank Wall Street Reform and Consumer Protection Act,�
Pub.L.111-203, and its corresponding regulation at 12 C.F.R. s.1002, known as
�regulation B;�

���� (2)�� determine
if a regulated financial institution has acted in a manner unfair, deceptive,
or abusive that violates consumer protection or fair lending and housing laws
intended to ensure the fair, equitable, and nondiscriminatory access to credit
for individuals and communities that are enforced by the Consumer Financial
Protection Bureau or other federal agencies.� The written evaluation shall be
negatively influenced in a manner commensurate with the extent of the harm
suffered by individuals and communities;

���� (3)�� solicit
and consider public input on the performance of the institution being examined
pursuant to the federal �Community Reinvestment Act of 1977,� Pub.L.95-128 (12
U.S.C. s.2901 et seq.); and

���� (4)��
take the record into account in the department�s evaluation
of an application for a deposit facility or license by a regulated financial
institution.� The department shall:

����
(a)�� consider the record described in paragraphs (1) and
(2), the overall rating of the institution under this section, and any
improvement plans submitted pursuant to this section;

���� (b)�� provide
an opportunity for public comment for a period of not less than 60 days;

���� (c)�� consider
changes in the community reinvestment and fair lending performance of the
institution since the most recent rating under this section; and

���� (d)�� require:

���� (i)��� a
demonstration of public benefits, including a community benefits plan with
measurable goals regarding increasing responsible lending and other financial
products that are commensurate with the ability of the institution to
accomplish those goals;

���� (ii)�� that
the institution consult with community-based organizations and other community
stakeholders in developing a community benefits plan; and

���� (iii)� a
public hearing for any institution that has a received a �needs-to-improve� or
�low satisfactory� grade in any individual assessment area during the most
recent examination.

���� b.���
In assessing and taking into account, under subsection a.
of this section, the record of a nonminority-owned and non-women-owned regulated
financial institution, the department may consider, as a factor, capital
investment, loan participation, and other ventures undertaken by the
institution in cooperation with minority- and women-owned financial
institutions and low-income credit unions, provided that these activities help
meet the financial needs of local communities in which the institutions are
chartered.

���� 4.��� a.�

Upon the conclusion of each examination of a
regulated financial institution pursuant to section 3 of this act, the department
shall prepare a written evaluation of the institution's record of meeting the
needs of its entire community, including low- and moderate-income consumers and
neighborhoods, other distressed or underserved communities and other
underserved populations.

���� b.���
As appropriate, the department may conduct exams jointly
with federal supervisory agencies in the case of depository institutions or
other regulated financial institutions that are or could be subject to a
federal requirement pursuant to the federal �Community Reinvestment Act of
1977,� Pub.L.95-128 (12 U.S.C. s.2901 et seq.).

���� c.���� The
department shall:

���� (1)�� examine
every regulated financial institution for compliance with section 3 of this act
no less than once every three years; and

���� (2)�� make
public an examination schedule at the beginning of each year and update the
schedule each quarter, and invite public comment related to a regulated
financial institution�s compliance with this act
.

���� d.��� Each
written evaluation required under subsection a. of this section shall have a
public section and a confidential section.

���� e.���� The
public section of the written evaluation shall:

���� (1)�� state
the department�s conclusions for each exam criterion and any subtest identified
in the regulations, as prescribed by the department to effectuate the purposes
of this act;

���� (2)�� discuss
the facts and data supporting the conclusions; and

����
(3)�� contain the regulated financial institution's rating
and a statement describing the basis for the rating.

����
The information required by subparagraphs (1), (2) and (3)
of this subsection shall be presented separately for assessment areas including
the State, metropolitan areas, urban or rural counties or groupings of rural
counties.

���� f.���� The
rating of a regulated financial institution referred to in paragraph (3) of
subsection e. of this section shall be one of the following:

����
(A)� �Outstanding record of meeting community needs;�

����
(B)� �Satisfactory record of meeting community needs;�

����
(C)� �Low satisfactory record of meeting community needs;�

����
(D)� �Needs to improve record of meeting community needs;�
or

����
(E)� �Substantial noncompliance in meeting community
needs.�

���� As
it deems appropriate, the department may amend these rating categories by
adding new ones or altering the existing categories, and may also add a point
scale.

���� g.���
The
confidential section of the written evaluation shall contain all references
that identify any consumer of the regulated financial institution, any employee
or officer of the institution, or any individual or organization that has
provided information in confidence to the department or a federal financial
supervisory agency.

���� h.���
The
confidential section shall also contain any statements obtained or made by the department
in the course of an examination which, in the judgment of the department, are
too sensitive or speculative in nature to disclose to the regulated financial institution
or the public.

���� i.����
The confidential section may be disclosed, in whole or part, to the
regulated financial institution, if the department determines that the
disclosure will promote the objectives of this act.� However, disclosure shall
not identify an individual or organization that has provided information in
confidence to the department or a federal financial supervisory agency.

���� 5.��� a.�
The department shall contract with qualified individuals
for a disparity study that shall identify underserved counties, populations, and
census tracts in the State.�

���� b.��� The
study shall:

���� (1)�� identify
segments of the population that are underserved because they are experiencing
disparities in lending or discrimination by metropolitan areas and by urban and
rural counties;

���� (2)�� be
updated once every three years and made publicly available;

���� (3)�� inform
the examinations described in section 4 of this act; and

���� (4)�� identify
disparities in access to retail loans, community development financing, and
branches and other bank services experienced by various groups of consumers and
geographical areas.

���� c.���� In
carrying out each study required under subsections a. and b. of this section,
the department may make available to federal financial supervisory agencies
data collected, including the following:

���� (1)�� data
obtained under the �Home Mortgage Disclosure Act of 1975,� Pub.L.94-200 (12
U.S.C. s.2801 et seq.);

���
(2)�� data obtained under section 704B of the �Equal Credit
Opportunity Act,� as added by section 1071 of the �Dodd-Frank Wall Street
Reform and Consumer Protection Act,� Pub.L.111-203 (12 U.S.C. s.1691c-2);

���
(3)�� data obtained under the �Community Reinvestment Act
of 1977,� Pub.L.95-128 (12 U.S.C. s.2901 et seq.);

���
(4)�� other available State data; and

���
(5)�� information contained in public litigation against
regulated financial institutions for redlining or lending discrimination, including
litigation initiated by the federal Consumer Financial Protection Bureau, the U.S.
Department of Housing and Urban Affairs, the U.S. Department of Justice, or by
private parties.

���� d.��� The
department shall make the results of its disparity study publicly available on
its website and shall issue a report of its findings to the Legislature,
pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), that shall include
recommendations addressing the identification of policies, practices, and
procedures that contribute to disparities and discrimination in access to
credit and banking services.

���
6.��� a.�

The department shall require an improvement plan for
a regulated financial institution that receives a rating of �low satisfactory�
or lower on the written evaluation of the institution or in any individual
assessment area of the institution.� The plan shall result in the reasonable
likelihood that the institution will obtain a rating of at least �satisfactory�
in meeting community credit or other financial needs in the relevant assessment
areas on the next examination.

���� b.
��� A regulated financial institution that is required to
submit an improvement plan required under subsection a. of this section shall
submit the plan in writing to the department not later than 90 days after
receiving notice that the regulated financial institution is required to submit
the plan.

���� c.���� Upon
receipt of an improvement plan of a regulated financial institution required pursuant
to subsection a. of this section, the department shall:

���� (1)�� make
the plan available to the public for review and comment for a period of not
less than 60 days; and

���� (2)�� require
the regulated financial institution to revise, as appropriate, the improvement
plan in response to the public comments received and submit the updated plan to
the department not later than 60 days after the end of that period.

���� 7.��� a.�
In the case of any depository institution which donates, sells on favorable
terms, as determined by the department, or makes available on a rent-free basis
any branch of the institution which is located in any predominantly minority
neighborhood to any minority depository institution or women's depository
institution, the amount of the contribution or the amount of the loss incurred
in connection with the activity may be a factor in determining whether the
depository institution is meeting the credit needs of the institution's
community for purposes of this act.

���� b.��� For
purposes of this section:

���� �Minority
institution� means a depository institution where:

���� (1)�� more
than 50 percent of the ownership or control is held by one or more minority
individuals;

���� (2)�� more
than 50 percent of the net profit or loss of which accrues to one or more
minority individuals; and

���� (3)�� a
significant percentage of senior management positions are held by minority
individuals.�

���� �Women's
depository institution� means a depository institution where:

���� (1)�� more
than 50 percent of the ownership or control is held by one or more women;

���� (2)�� more
than 50 percent of the net profit or loss of which accrues to one or more
women; and

���� (3)
a significant percentage of senior management positions are held by women.

���� 8.��� a.�
Each regulated financial institution shall collect and maintain in machine readable
form, as prescribed by the department, data on the categories of community
development lending and investments, including data regarding financing
affordable housing, small business development, community facilities, and
economic development.

���� b.��� The
department shall publicly disseminate the data described in subsection a. of
this section for:

���� (1)�� each
regulated financial institution on a county level and for categories of census
tracts including low- and moderate-income census tracts or other distressed and
underserved census tracts; and

���� (2)�� the
aggregate regulated financial institutions covered by this act by individual
census tracts in addition to the categories described in paragraph (1) of this
subsection.

���� 9.��� a.�

The department shall have the authority to adjust fees paid by regulated
financial institutions in part based on the rating received by the institutions
under this act.

���� b.���
Any
regulated financial institution receiving a rating of �needs to improve� or �substantial
noncompliance� shall not be eligible to receive deposits from a State agency.

���� 10.� A regulated financial
institution shall provide, in the public lobby of each of its offices, if any,
and on its website, a public notice that is substantially similar to the
following:

����������������������� State
Community Reinvestment Notice

���� The Department of Banking and
Insurance evaluates our performance in meeting the financial services needs of
this community, including the needs of low-income to moderate-income households
and other underserved populations and communities.� The department takes this
evaluation into account when deciding on certain applications submitted by us
for approval by the department.� Your involvement is encouraged.� You may obtain
a copy of our evaluation.� You may also submit signed, written comments about
our performance in meeting community financial services needs to the department.

���� 11.� The Commissioner of
Banking and Insurance, pursuant to the �Administrative Procedure Act,�
P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations to
effectuate the provisions of this act.

���� 12.� P.L.1991, c.294
(C.17:16Q-1 et seq.) is repealed.

���� 13.� This act shall take
effect immediately.

STATEMENT

���� This bill establishes a
community reinvestment law for the State of New Jersey.� It requires similar
analysis and evaluation of banks, mortgage companies, and credit unions to
determine and rate if these institutions are lending, investing, and providing
financial services to low- and moderate-income consumers and communities.� This
includes underserved communities and populations.

���� Under the bill, the Department
of Banking and Insurance (the �department�) is to review activities of the
various regulated financial institutions in the State every three years. This
includes reviewing various types of products and services offered by an
institution including, but not limited, to: 1) retail lending, such as home and
small business loans; 2) community development lending; 3) low-cost deposit
accounts and other retail financial services; and 4) how an institution works
with delinquent consumers.� Upon the department�s examination, a rating is
assigned to an institution.� If a rating of �low satisfactory� or lower is
given to a regulated financial institution, an improvement plan is to be
developed between the institution, the department, and comments from members of
the public.

���� Additionally, under the bill,
the department is to develop a disparity study.� This is to identify
underserved counties, populations, and census tracts in the State.� Data
collected for this study may be shared with federal agencies.� Upon completion,
a report of the findings and recommendations is to be issued to the
Legislature.

���� Lastly, each regulated
financial institution is to post a notice in each branch, or on its website, a
notice for public consumption stating, in part, that the institution�s
performance is evaluated based on how it meets the needs of its community and
that a copy of the evaluation is available for review.