Merrick Garland, Biden DOJ unveil plan to crack down on discriminatory financial lenders
The Justice Department has been given the mandate to increase efforts to investigate and file fair lending lawsuits in accordance with the 1968 Fair Housing Act as well as the 1974 Equal Credit Opportunity Act. These laws prohibit discrimination against people based on their race, religion, or gender.
“Much has been accomplished since the Depression-era redlining by the federal government, but there are still discriminatory lending practices being used by financial institutions,” Mr. Garland stated. “Unfortunately, redlining remains a persistent form of discrimination that harms minority communities.”
A Justice Department A spokesperson for mentioned two redlining cases against Cadence Bank and Trustmark National Bank in August when The Washington Times asked how many redlining reports the agency had received and how many cases it has filed in this area in the past year. According to the spokesperson, only cases that are public .”
can be reported by the agency.
The term “redlining” grew from housing programs in the 1930s-era New Deal, in which the federal government would create maps to rank the loan worthiness of residents in certain neighborhoods. The most dangerous neighborhoods were those highlighted in red. These were often Black neighborhoods.
Mr. Garland stated that redlining is contributing the nation’s large racial wealth gap. This is “clearly reflected” in current homeownership rates .”
The country’s homeownership rate is 65.4%, with White non-Hispanics at the highest rate (74.2%) and Blacks at the lowest rate (44.6%), according to Census Bureau data from the second quarter of 2021.
The initiative will see the DOJ’s Civil Rights Division work with U.S. attorney’s offices in coordination of enforcement efforts at a larger scale.
” Their participation will ensure fair lending enforcement is informed from local expertise on housing market and credit needs of local communities. Their understanding of demographic shifts, relationships with community groups, and their relationship with them have proved quite valuable,” Mr. Garland stated.
The division will also collaborate with the Consumer Financial Protection Bureau and financial regulatory agencies, consumer advocates, and other industry stakeholders to eliminate discriminatory lenders.
The new initiative is part of the Biden administration’s efforts to increase minority homeownership. The House Democrats are working hard to pass a $3.5 trillion package which would expand the social security net. It currently includes $300 billion housing programs.