NCRC Comment Opposing OceanFirst and Flushing Merger

March 2, 2026

Ann E. Misback, Secretary
Board of Governors of the Federal Reserve
20th Street and Constitution Avenue, N.W.
Washington D.C. 20551
publiccomments@frb.gov

Debra M. Burke, Director for Licensing
OCC Community Bank Regions: Northeast, East
400 7th St. SW
Washington, D.C. 20219
Licensing@occ.treas.gov

William Spaniel, Senior Vice President
Federal Reserve Bank of Philadelphia
100 North 6th Street,
Philadelphia, Pennsylvania 19105–1521
Comments.applications@phil.frb.org

Submitted Electronically

RE: OceanFirst Financial Corp., Toms River, New Jersey; to merge with Flushing Financial Corporation, and thereby indirectly acquire Flushing Bank, both of Uniondale, New York.

Dear Ms. Misback, Ms. Burke, and Mr. Spaniel:

The National Community Reinvestment Coalition (NCRC) submits this comment in response to the Federal Reserve’s notice regarding the proposed merger of OceanFirst Financial Corp., Toms River, New Jersey, and Flushing Financial Corp., Uniondale, New York. If approved, this transaction would combine two regional banking institutions with a significant footprint across New Jersey, New York, and surrounding metropolitan areas, expanding the resulting institution’s market share and influence in several highly competitive and demographically diverse banking markets. Because of the transaction’s scale and its potential impact on competition, fair access to credit, and the availability of banking services for low- and moderate-income (LMI) communities, NCRC strongly urges the Board of Governors to condition approval of this application on the adoption of a robust Community Benefits Agreement (CBA).

NCRC is a coalition of more than 700 community-based organizations dedicated to advancing fairness and equity in banking, housing, and lending. Our members include community development financial institutions (CDFIs), housing counselors, civil rights organizations, and local nonprofits that work directly with consumers and small businesses most affected by bank practices and credit access. Given our longstanding engagement in the New York–New Jersey region and our expertise in Community Reinvestment Act (CRA) compliance and bank-merger review, NCRC is uniquely positioned to assess the likely effects of this merger on community reinvestment, financial inclusion, and economic opportunity within the combined institution’s footprint.

1.  CRA Performance and Community Impact 

The Community Reinvestment Act (CRA) requires banks to serve the credit needs of the entire community, including LMI borrowers and neighborhoods. Regulators must evaluate not only financial considerations but also the applicant’s record of meeting community credit needs under the Bank Merger Act.

OceanFirst’s record raises significant concerns. From 2018 through 2020, OceanFirst received a “Needs to Improve” CRA rating. That rating alone warrants heightened scrutiny of any expansionary merger. A bank with a recent Needs to Improve rating should not be permitted to grow its footprint in major metropolitan markets without clear, enforceable commitments to address past deficiencies.

Moreover, available data show that OceanFirst trails peers by more than ten percentage points in mortgage lending in three out of its six assessment areas (see Appendix). These gaps indicate ongoing and meaningful disparities in access to home purchase and refinance credit, particularly concerning in high-cost housing markets such as New York and New Jersey where access to mortgage capital is essential for wealth-building and neighborhood stability. OceanFirst’s branch distribution also falls short: overall, OceanFirst is roughly 19.44% behind peers in placing branches in majority-minority census tracts. The gaps are particularly concerning in New York City, Newark, Jersey City, Atlantic City, Hammonton, Trenton, and Princeton.

The merger would also bring together operations in the New York-Newark-Jersey City metropolitan statistical area, a region with persistent racial wealth gaps, high housing cost burdens, and documented redlining histories. Expanding into Queens, Brooklyn, Manhattan, Nassau, and Suffolk counties without enforceable reinvestment commitments risks perpetuating existing inequities.

2.  Recent DOJ Redlining Consent Order

OceanFirst’s fair lending history raises serious concerns that must be central to any merger analysis.

On October 1, 2024, the U.S. District Court for the District of New Jersey entered a consent order in United States v. OceanFirst Bank, resolving allegations that OceanFirst violated the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) by redlining majority-Black, Hispanic, and Asian neighborhoods in Middlesex, Monmouth, and Ocean counties, New Jersey. This consent order was entered in October 2024—making it among the most recent fair lending enforcement actions against a bank currently seeking federal merger approval.

The Department of Justice alleged that OceanFirst systematically excluded communities of color from equal access to credit by:

• Focusing outreach and advertising disproportionately in majority-white communities;
• Deliberately siting branches in majority-white neighborhoods; and
• Closing its only branches serving majority-Black, Hispanic, and Asian neighborhoods—effectively withdrawing from those communities entirely.

These were not technical or isolated violations. They reflect a pattern of institutional decision-making that concentrated resources in white communities while withdrawing them from communities of color.

To resolve these allegations, the consent order requires OceanFirst to:

• Invest at least $14 million in a loan subsidy fund for affected communities;
• Spend $700,000 on advertising, outreach, and consumer financial education in underserved areas;
• Spend $400,000 on community partnerships;
• Open and maintain a loan production office and a full-service branch in impacted neighborhoods; and
• Conduct a community credit needs assessment and strengthen fair lending oversight and training.

OceanFirst remains under active court-ordered remediation through approximately 2029. The bank must still invest in affected communities, maintain branches in redlined neighborhoods, and meet continuous fair lending oversight requirements. Approving a major expansion before OceanFirst has demonstrated sustained compliance would be premature.

This enforcement action is directly relevant to the proposed merger because the alleged conduct bears precisely on the Bank Merger Act’s public interest factors and the CRA’s mandate to assess how institutions serve the credit needs of their entire communities. OceanFirst’s discriminatory branch placement, racially targeted marketing, and withdrawal from communities of color are exactly the types of practices regulators must weigh under both statutes.

Flushing Bank, by contrast, has built its franchise in the diverse, immigrant-rich communities of Queens, Brooklyn, and Long Island. Allowing OceanFirst to acquire Flushing and absorb its community relationships, branch network, and customer base without binding enforceable conditions would create a substantial risk that OceanFirst’s institutional practices supplant Flushing’s community-oriented model.

3.  Recommendations

NCRC urges the Federal Reserve to condition approval of this application on the negotiation and adoption of a Community Benefits Agreement that includes the following commitments:

1. Affordable Housing and Mortgage Lending
   • Increased lending to LMI borrowers and neighborhoods, with measurable benchmarks for home purchase, home improvement, and refinance loans.
2. Small Business Lending
   • Expanded access to credit, including micro-loans, for underserved businesses.
3. Community Development Investments
   • Significant commitments to support affordable housing, CDFIs, and nonprofit partners.
4. Branch and Service Access
   • A commitment to open at least five branches within five years of the merger closing date, in LMI or MM census tracts in assessment areas where the bank(s) trail peers in branch distribution.
   • A moratorium on branch closures in LMI and rural markets, along with targeted investments in equitable digital banking access.
5. Transparency and Accountability
   • Regular public reporting on progress toward CBA goals, with ongoing input from community stakeholders.
   • Formation of a Community Advisory Council, made up of community leaders throughout the combined bank’s footprint, which meets 2-4 times per year to discuss CBA goals progress.

4.  Conclusion

OceanFirst seeks to expand aggressively into some of the most diverse and economically stratified markets in the country while carrying a recent Needs to Improve CRA rating and a 2024 federal redlining consent order.

The Bank Merger Act requires regulators to consider the convenience and needs of the communities to be served. Without enforceable, measurable commitments, this transaction risks deepening existing disparities in mortgage access, branch distribution, and financial inclusion.

For these reasons, NCRC respectfully urges regulators to condition approval of this application on the adoption of a comprehensive Community Benefits Agreement negotiated with community stakeholders and aligned with the purposes of the CRA, ECOA, and the Fair Housing Act.

Thank you for your consideration.

Sincerely,

Jesse Van Tol
Chief Executive Officer
NCRC

Appendix

Ocean First Mortgage Lending Data:

OceanFirst Branch Analysis: