Trade association fights New Jersey’s race-based lending mandate
September 03, 2026
Trenton, New Jersey; September 3, 2026: A national mortgage lending trade association filed a lawsuit today challenging a New Jersey rule that threatens lenders and landlords with discrimination liability for using neutral, merit-based underwriting and leasing standards. The Mortgage Bankers Association (MBA) argues that the rule—which pressures lenders and landlords to consider race in lending and renting decisions or risk discrimination liability for refusing to do so—violates the Equal Protection Clause and federal civil rights law.
“New Jersey’s rule turns equal treatment into a legal risk and pushes businesses toward the very race-based decision-making the Constitution forbids,” said Wilson Freeman, an attorney with Pacific Legal Foundation. “The government cannot punish businesses for treating people as individuals. Landlords and lenders should be free to consider relevant information without unconstitutional pressure to pursue racial balancing.”
In December 2025, the New Jersey Division on Civil Rights adopted a rule expanding the state’s discrimination law beyond federal constitutional guardrails. The rule covers lending, employment, housing, contracting, education, and more. For mortgage lenders and landlords, ordinary information-gathering—evaluating whether a borrower can repay a loan or a tenant can pay rent—can trigger liability if outcomes differ across demographic groups, regardless of intent. The only safe path is to ensure policies produce demographically “balanced” outcomes—placing businesses in an unfair double-bind.
The lawsuit challenges New Jersey’s attempt to force private citizens into race-based decision-making, in violation of the Equal Protection Clause’s guarantee that government treat people as individuals, not racial groups. The rule also conflicts with federal civil rights law, which bars lenders and employers from treating people differently based on race.
Pacific Legal Foundation represents the Mortgage Bankers Association free of charge. The case is Mortgage Bankers Association v. Jennifer Davenport.
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About Pacific Legal Foundation
Pacific Legal Foundation is a national nonprofit law firm that defends Americans threatened by government overreach and abuse. Since our founding in 1973, we challenge the government when it violates individual liberty and constitutional rights. With active cases in 34 states plus Washington, D.C., PLF represents clients in state and federal courts, with 18 wins of 21 cases litigated at the U.S. Supreme Court.