Progress reported in fighting racist lending practices

diversity-racial-discriminationBY ED FELIEN

Minneapolis City Council Member Blong Yang will hold a hearing in his committee on the evidence of racist redlining lending practices by Minneapolis banks.  Council Member Cam Gordon, in his newsletter to his ward, said, “On July 23 (1:30 p.m.) Myron Orfield from the Institute on Metropolitan Opportunity from the University of Minnesota Law School will formally present the findings of the report “Twin Cities in Crisis: Unequal Treatment of Communities of Color in Mortgage Lending” to the Public Safety, Civil Rights and Emergency Management Committee. This will give the committee members the opportunity to learn more, ask questions, discuss the information and consider what, if any, further action is appropriate. Representatives from the major lending institutions in the area have also been invited to make a presentation in response to the findings of the study. The report, that you can find here: http://www.law.umn.edu/metro/index.html, raises serious questions about discriminatory lending practices that have disproportionately harmed people of color. It states, ‘In 2004-06 subprime loans were the major problem—very high-income black and Hispanic applicants were much more likely to get subprime loans than very low-income white applicants. More recently, the subprime market has largely disappeared, but it is still true that very high income black loan applicants are more likely to be denied a loan than low- income whites. In addition, racially diverse and majority non-white neighborhoods are dramatically still underserved in the mortgage market.’ ”
Southside Pride has submitted a report to the United Nations International Conference to End Racial Discrimination meeting in Geneva, Switzerland.  It has been accepted by the committee and will be included in its executive summary.  The report is on page 5 of this edition.
Discrimination based on race in lending practices is also a violation of Minnesota state law.
From state statutes: “When the attorney general has information providing a reasonable ground to believe that any person has violated, or is about to violate, any of the laws of this state referred to in subdivision 1, the attorney general shall have power to investigate those violations, or suspected violations, and to take such steps as are necessary to cause the arrest and prosecution of all persons violating any of the statutes specifically mentioned in subdivision 1 or any other laws respecting unfair, discriminatory, or other unlawful practices in business, commerce, or trade. In connection with investigation under this section the attorney general upon specifying the nature of the violation or suspected violation may obtain discovery from any person regarding any matter, fact or circumstance, not privileged, which is relevant to the subject matter involved in the pending investigation, in accordance with the provisions of this subdivision.”
We presented Minnesota State Attorney General Lori Swanson with the evidence of racist lending practices by Minnesota mortgage bankers contained in The Lending Report.  Her office responded:
“Thank you for your inquiry concerning the report issued by the Institute on Metropolitan Opportunity entitled: ‘Twin Cities in Crisis:  Unequal Treatment of Communities of Color in Mortgage Lending.’
“No lender should issue a homeowner a more expensive mortgage due to the color of their skin or the racial composition of their neighborhood, or deny them credit for these reasons.  We have reviewed the report and are sympathetic to and troubled by its findings.
“This Office does not operate in a vacuum but rather functions alongside other state and federal agencies.  We have forwarded the report to the Minnesota Department of Human Rights, the federal Office of the Comptroller of the Currency, the United States Department of Justice, the Consumer Financial Protection Bureau, and the United States Department of Housing and Urban Development, which have the authority over various state and federal anti-discrimination, fair lending, civil rights and community reinvestment laws.  We look forward to conferring with those agencies on their findings.”
We wrote to State Sen. Scott Newman, the Republican endorsed candidate for attorney general, to ask his opinion on the evidence of racist lending practices.  He has not responded.
Andy Dawkins, the Green Party candidate for attorney general, responded:  “If elected attorney general, I will launch a systematic review to make sure there is equal application of the law to big bank activities in the mortgage industry.  I will work to amend or nullify any laws or policies having a discriminatory effect on minority homeownership.  And, unlike the incumbent attorney general, I will be better equipped to do this because I am and will remain independent of corporate cash and establishment party politics. Minnesotans deserve a fair deal from our mortgage lenders.  If the incumbent had set appropriate priorities, and fully empowered the consumer enforcement division in her office, we might not need Minnesotans having to beseech the United Nations for justice.”
Willie Nelson has a song about this:
“There’s a home place under fire tonight in a heartland
And bankers are taking the homes and the land away
There’s a young boy closin’ his eyes tonight in a heartland
Who will wake up a man with some land and a loan he can’t pay
His American dream fell apart at the seams
You tell me what it means you tell me what it means
My American dream …”
Southside Pride will continue to follow this story until some measure of justice is gained for the victims of racist lending practices by Minnesota bankers.  We believe banks have committed serious crimes against the people of Minnesota, and no amount of money in fines and compensation can buy back the homes disrupted and the hopes of small children that have been destroyed.  The legislature must enact laws that lock up bankers guilty of these crimes.  As soon as the first banker goes to prison for racist crimes, the practice will stop.  The first sentence of the oath of office for all elected officials is to protect the public welfare—not to protect the banking interests.

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