Embargoed until: Wed., Dec.10, 2003 Contact: Rachel Maleh
Washington, DCDec.10The National Community Reinvestment Coalitions (NCRC) release of The Broken Credit System: Discrimination and Unequal Access to Affordable Loans by Race and Age documents widespread lending discrimination. After controlling for credit risk, the report finds that high cost lending surges as the number of minority and elderly residents increase in a neighborhood. NCRC is joined by NAACP, National Council of La Raza, AARP, Consumer Federation of America, National Puerto Rican Coalition (NPRC), US Conference of Mayors and Housing Assistance Council, in expressing concerns over the implications of the study.
This study shows clearly that two banking systems exist in America. If you live in a white neighborhood, you will get a market rate loan. If you live in a predominantly minority or elderly neighborhood, you will get a high cost loan. Driving while Black refers to more frequent stops and/or harassment by the police. Banking while Black or Elderly means that you are most likely to get gouged by high interest rates and fees, exclaims John Taylor, President and CEO of the National Community Reinvestment Coalition.
NCRCs report looks at ten large metropolitan areas: Atlanta, Baltimore, Cleveland, Detroit, Houston, Los Angeles, Milwaukee, New York, St. Louis, and Washington DC.
Across these metropolitan areas NCRC finds lending discrimination in the form of steering high cost home mortgage and refinance loans to minorities and elderly borrowers who qualified for market rate loans. This steering results in equity stripping and has contributed to inequalities in wealth. According to the Federal Reserve Survey of Consumer Finances, the median home value for whites was $130,000 and only $92,000 for minorities in 2001.
This widespread evidence of price discrimination and wealth stripping threatens the possibility of creating sustainable and affordable homeownership opportunities for minorities and the elderly, as well as jeopardizes the Bush Administrations goal of 5.5 million new minority homeowners by the end of the decade. NCRCs report includes several recommendations for consumers, legislators, regulatory officials, and lenders about how to eliminate discrimination and increase the chances of promoting and protecting homeownership in minority and elderly communities.
The NCRC study conclusively lays out how persistently and pervasively unfair and unequal access to credit continues to be a problem still in the 21st century. NAACP will be utilizing NCRCs conclusive study to leverage stronger and more comprehensive lending policies to guarantee all Americans, regardless of race, gender, ethnicity, geographies, age and other concerns, have equal protection and access to capital and opportunity under the law, states Hilary O. Shelton, Director, NAACP. NCRC proposes several recommendations to fix the broken credit system, including: increased enforcement of existing laws by Federal Agencies; halting preemption of state anti-predatory and consumer protection laws; and increased oversight by the Federal Reserve on anti-discrimination and fair lending laws.
NCRC is the nations leading trade association for economic justice whose members consist of local community based organizations. NCRCs mission is to bring low- and moderate-income populations across the country into the financial mainstream. For more information on NCRC and fair lending practices contact NCRC at 202-628-8866.
Editors note: To schedule an interview contact Rachel Maleh at 202-628-8866 or via email at firstname.lastname@example.org.