Laws today forbid discrimination based on race, color, religion, sex, national origin, handicap, familial status, age, and whether you receive public assistance income. This book substitutes rigorous and systematic analysis for the undocumented claims that have characterized the debate on "redlining"--the denial of mortgage money to poorer neighborhoods. These include white papers, government data, original reporting, and interviews with industry experts. !���G��Q�$ғ�D-V���:�S�>��,�ngX[T�3wM�k�懴Ye,�f���n�}���hD�L�&��Ds�;�By���>۹�"�H���2��\Y�Ksu��rJmI8�BX:�'=�/�7��3�^ά)oFj�Ru�"�?�Y���Z�L�D;�����{L� �^�����Wq�x��?��T )�K��J0���������tȉ�D*���$P�hځ�� �\�I�\�ïH6\8977��g����엽�]j��Lf���z�X3�T:M�8(�Ӳ� �Y�%9�]�yn)&�H�MR��,�3��� ܒ�TE�ݯ_�@�v�M�E�=�;߂�?Y�=4�q!B�-n��o{�����× �S���m�[���C�Y�P���m���l��*�mL�4j�;;��m�.����5���c����������a{�x]+�� |=�T �)�����G���i���0H��y����?9�'دݧ�a�"�U��mI.�z�H��V���0��/L UO�z�� Accessed Sept. 17, 2020. %%EOF Accessed Sept. 17, 2020. 0000002116 00000 n Redfin Real Estate Brokerage. Matched-pair tests revealed similar disparities for PPP loan applicants. xref Accessed Sept. 17, 2020. The premise of expanding … Lending discrimination occurs when a person goes to a bank and asks for a loan, but he or she is denied that loan due to his or her protected status. "Auto loans are the third most prevalent form of debt among U.S. residents after home and student loans, and over three-fourths of new cars are purchased using an auto loan," the report states. %PDF-1.3 %���� 0000002789 00000 n Guides prospective first-time homeowners on the process of buying a house, covering such topics as hiring an agent, financing a mortgage, and managing a closing. Similarly, predominantly White neighborhoods receive, on average, about twice as many small-business loans per capita. %%EOF 72 22 }»‡ôáÃìvLKœ4\ِ{CßDd‹!«\Óó›¦ Ø¬W}ÀnÁìÑÌѨ–0óÃ%¥4No֍Œ÷n: W!šÂý€AÄ]\A¤‹‹sršYZzJZJs3CÖÒ¶U8 çPÓ Ã â@Œ%µ2qÕ4¢492lç‡Ôè0Óó­7,߬Î:vð|j4»Ýš™oaºSnFlý4[[ìTirr˜é‡ÒˆëŽ_“ž_íí*þ¸4âZè†âÇn¡B”ÒŒ€X L!‹d ±@4PP ¨Œˆ•ÀJ™…@A.À`lÀŽA&%¦¦ˆP¤€’(^€ Ÿ%ä. endstream endobj startxref x�b```"+V�� ��ea�h r@";L��-�z`3C�D=���BÇ�� Shapiro, the author of "Black Wealth/White Wealth," blends personal stories, interviews, empirical data, and analysis to illuminate how family assets produce dramatic consequences in the everyday lives of ordinary citizens. <<9066f6fe536c5841996e2437bc24d830>]>> 74% of neighborhoods that HOLC graded as “hazardous” more than 80 years ago are low-to-moderate income (LMI) today. Example: A lender offered a credit card with a limit of up to $750 for applicants aged 21-30 and $1500 for applicants over 30. "HOLC ‘Redlining’ Maps: The Persistent Structure Of Segregation And Economic Inequality." .yM66hd�BW��IJ�ljh/���P? As do other forms of lending discrimination, auto lending discrimination has broad implications. Consumer Financial Protection Bureau. Second, housing has all but disappeared as a major social policy issue over the past two decades. This timely book shows how unequal housing choices and sprawling development create an unequal geography of opportunity. University of California at Berkeley. The Fair Housing Act prohibits discrimination in loans that are secured by residential real estate or that are for the purchasing, constructing, improving, repairing or maintaining a dwelling. 74 0 obj<>stream "Housing Discrimination Under the Fair Housing Act." Attorneys general should pursue state claims against auto financers instead of federal claims. Fair Lending regulations are designed to prevent discrimination in any aspect of the lending process. As a compliance professional, your Fair Lending compliance management program is all about ensuring that similarly situated individuals are treated similarly, and the potential for discrimination to occur is limited. Studies of mortgage approvals find that minority borrowers are more likely to be denied loans, even when background variables such as current-year income are held constant. 0000000736 00000 n 0000008731 00000 n “The mode of lending discrimination has shifted from human bias to algorithmic bias,” said study co-author Adair … It forbids discrimination based on race, color, religion, sex, national origin, handicap, or familial status during any part of a residential real estate transaction., Despite the Fair Housing Act, discriminatory lending and housing practices continued, and civil rights groups advocated for more legislation. Redlining is one factor behind the persistent racial wealth gap in the U.S. today. A new report from The Business Journals found White neighborhoods receive roughly twice as much per person in small-business loans compared with Black neighborhoods. These barriers take on added urgency when they are related to race or ethnicity. In this book Stephen Ross and John Yinger discuss what has been learned about mortgage-lending discrimination in recent years. Found insideThis is the story of how public goods in this country—from parks and pools to functioning schools—have become private luxuries; of how unions collapsed, wages stagnated, and inequality increased; and of how this country, unique among ... Share of current balances that exceed original, by origination year. The book examines how disparities in treatment may arise in health care systems and looks at aspects of the clinical encounter that may contribute to such disparities. trailer For decades U.S. banks denied mortgages to Black families—and those belonging to other minority groups—who lived in certain areas “redlined” by a federal government agency called the Home Owners’ Loan Corporation (HOLC). Mortgage discrimination or mortgage lending discrimination is the practice of banks, governments or other lending institutions denying loans to one or more groups of people primarily on the basis of race, ethnic origin, sex or religion. Accessed Sept. 17, 2020. startxref 2001).One startling conclusion from this line of research is the frequency with which discrimination is reported. Congress. Lending discrimination happens when lenders base credit decisions on factors other than the borrower’s creditworthiness, including any of the protected classes defined under federal law. Redlining is the discriminatory practice of denying services (typically financial) to residents of certain areas based on their race or ethnicity. The Economics of Aging presents results from an ongoing National Bureau of Economic Research project. Lending discrimination occurs when a credit decision is based on factors other than the applicant's creditworthiness. Creditors may ask you for most of this information in certain situations, but they may not use it as a reason to deny you credit or to set the terms of your credit. Consumer Financial Protection Bureau. Board of Governors of the Federal Reserve System. Using NYU as one metric, the Student Borrower Protection Center report found that private companies’ use of educational data could negatively impact students’ loan rates at historically Black colleges or universities and Hispanic-serving institutions. Next City. With nearly 65% of its neighborhoods marked in red, Macon, Ga., was the most redlined city in the U.S. Here’s a list of the 10 cities with the most neighborhoods marked “hazardous” in the 1930s, per a National Community Reinvestment Coalition (NCRC) study as reported by the informational website NextCity.com., The immediate effect of redlining was that residents in minority neighborhoods couldn’t access capital that could improve the residents’ housing (to buy or renovate) and economic opportunities. Here are a few of the lingering effects of redlining. Instead, as a 2018 study by the National Community Reinvestment Coalition (NCRC) shows, the economic and racial segregation created by redlining persists in many cities today., By comparison, 91% of areas deemed “best” in the 1930s remain middle-to-upper income (MUI) today, and 85% are still predominantly White., The median net worth of Black families is about 10% that of White families; Latinx families’ median net worth is about 12%., According to the Mapping Inequality project of the University of Richmond, “As homeownership was arguably the most significant means of intergenerational wealth building in the United States in the twentieth century, these redlining practices from eight decades ago had long-term effects in creating wealth inequalities that we still see today.”. 0000006953 00000 n Accessed Sept. 17, 2020. A new Northwestern University analysis finds that racial disparities in the mortgage market suggest that discrimination in loan denial and cost has not declined much over the previous 30 to 40 years, yet discrimination in the housing market has decreased during the same time period. There are not many academic studies of discrimination in auto lending. Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans at rates far higher than their white counterparts. The Community Reinvestment Act is a federal law that encourages lenders to meet the credit needs of low- and moderate-income neighborhoods. The results are in line with patterns of disparities in lending before the pandemic hit. Recent Trends in Wealth-Holding by Race and Ethnicity: Evidence from the Survey of Consumer Finances, Consumer-Lending Discrimination in the FinTech Era, For people of color, banks are shutting the door to homeownership, Redlining’s Legacy of Inequality: $212,000 Less Home Equity, Low Homeownership Rates For Black Families, About the Office of Fair Housing and Equal Opportunity (FHEO). The problem is that these studies have not produced a clear consensus on a set of conclusions.3 §525. ?�P�)Flpgc-Bb�h�m� L�Q[;g'j��S+-�&�y��y�8h78��lC�v���l��:{q��Y�`J This includes mortgages, refinancing, home equity loans and home improvement loans. 64% of the hazardous-graded areas are minority neighborhoods now. discrimination, the refusal to lend to individuals due to non-economic characteristics they possess. In these cases, lenders allegedly denied or delayed loans to working women because they were pregnant or on maternity leave. "For people of color, banks are shutting the door to homeownership." This policy violated the ECOA’s prohibition on discrimination based on age. Moreover, while the context of our study is consumer lending, the conceptual and empirical approach we 1 The potential for illegitimate statistical discrimination toward protected classes of … 0000001129 00000 n The importance of fair and equitable access to credit for minority and women-owned businesses, HOLC described A areas as “‘hot spots’…where good mortgage lenders with available funds are willing to make their maximum loans…—perhaps up to 75-80% of appraisal.”. Accessed Sept. 17, 2020. In 1974 Congress passed the Equal Credit Opportunity Act (ECOA). Here are a few other key findings that provide evidence of discrimination in small-business lending: Discrimination, whether seen in mortgage or small-business lending, has lasting effects. The New Deal was a series of programs enacted by President Franklin Delano Roosevelt intended to help the U.S. recover from the Great Depression. "Mapping Inequality: Redlining in New Deal America." The authors analyse wealth - total assets and debts rather than income alone - to uncover deep and persistent racial inequality in America, and show how public policies fail to redress this problem. Although evidence demonstratingtheexistence of these practices has been limited,z a recent study by the Federal Reserve Bank of Boston concluded that race played a �~�u�Q�&�̅^��o�~w 6��f Q�p�O������^��ͣt:L2��]���\ ���,8�r������! National Community Reinvestment Coalition. Northwestern researchers examined how discrimination in housing and mortgage lending … Jake Capriotti. Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans … The Federal Reserve Board¿s (FRB) Regulation B prohibits lenders from collecting certain data from loan applicants, such as their race or gender, for non-mortgage loans (e.g., small bus. loans).

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