Trump Ends Fed Enforcement Against Banks Who Screw Black & Brown People

[muckraker10021]

Trump Ends Fed Enforcement Against Banks Who Screw Black & Brown People

During the financial meltdown of 2007-2008 the world found out that the banksters were willfully & deliberately ripping off 'people of color' with sub-prime "shitty" loans 200% to 600% higher rates than white Americans regardless of their credit scores. As one white woman banker testified in an affidavit she “rode the stagecoach from hell” for a decade, systematically singling out blacks in Baltimore and suburban Maryland for high-interest subprime mortgages. She said They referred to blacks as “mud people” and to subprime lending as “ghetto loans.”We just went right after them (Blacks) she said.
http://www.nytimes.com/2009/06/07/us/07baltimore.html

This racist lending practice was widespread among the banksters. The auto companies also engaged in racist lending practices.

Elizabeth Warren now the U.S. Senator from Massachusetts under Obama set up the Consumer Financial Protection Bureau which policed the banksters and has recovered over $12,000,0000,0000 in financial settlements since its inception from corrupt avaricious banksters who had ripped off unsuspecting intimidated customers. Trump wants this policing enforcement to end! Fuck 'people of color' let them get ripped off and pay usury.

https://theintercept.com/2018/02/01/cfpb-mick-mulvaney-lending-housing-discrimination/

https://alliedprogress.org/news/donors-rejoice-mulvaney-intensifies-effort-gut-cfpbs-fight-discriminatory-lending-practices/

The Consumer Financial Protection Bureau and its Office of Fair Lending and Equal Opportunity, as previously structured, compiled a strong track record of working on behalf of communities of color. Trump wants to kill the entire agency:

• It developed a strategy for fighting discrimination in auto lending, resulting in settlements that returned $80 million in damages to people ripped off by Ally Financial, along with $18 million from Fifth Third bank.
• It helped resolve, with the Department of Justice, the largest redlining case in history against Hudson City Savings, which paid $33 million for lending assistance and community programs on behalf of majority-Black-and-Hispanic neighborhoods in New York, New Jersey, Connecticut and Pennsylvania.
• It assists in the day-to-day work of supervising the nation’s largest banks, and select other service providers, for compliance with fair lending laws.

Securing Almost $12 Billion in Consumer Relief

• The CFPB helped over 29 million individual consumers receive $11.8 billion dollars in due relief, while responding to over 1 million consumer complaints since openings its doors.[2]
• Through enforcement action alone, the CFPB reduced $7.7 billion in consumer debts while winning $3.7 billion in compensation for consumers.[3]
• Nearly 50 million households have benefited from new CFPB mortgage servicing protections that protect consumers from surprise costs and terms when repaying their mortgage, and offer additional protection if a borrower falls behind on their mortgage payment.[4]
• More recently, the CFPB, partnering with the Los Angeles City Attorney’s Office and the Office of the Comptroller of the Currency, uncovered deceptive banking practices at Wells Fargo Bank defrauding millions of customers.[5] Enforcement action by the CFPB forced Wells Fargo to pay full refunds to consumers harmed by illegal practices and to pay a $100 million penalty for their wanton behavior.

Protecting Service Members from Predatory Practices

• The CFPB’s enforcement actions provided $130 million in due compensation to service members, veterans, and their families that were harmed by illegal private sector predatory practices.[6]
• In collaboration with the Department of Defense (DOD), the Office of Servicemember Affairs at the CFPB visited more than 145 military installations, handling over 71,000 consumer complaints from service members and their families,[7] and advised DOD on better rules to protect service members from financial exploitation.[8]

Saving Consumers $16 Billion in Undisclosed Credit Card Fees

• The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, now under CFPB jurisdiction, reined in the usurious late fees charged on credit cards, limited predatory practices targeting young consumers on college campuses, curtailed sharp interest rate hikes, increased access to consumer credit, and made credit card costs more transparent, saving consumers more than $16 billion in undisclosed fees.[9]
• The number of new consumer credit cards increased steadily since implementation and enforcement of the CARD Act to 6.5 million new credit cards and $37.5 billion in available credit in July of 2016.[10]
• In collaboration with private industry, the CFPB made it easier for stay-at-home spouses to gain access to credit cards by allowing them to use total household income in their applications for new accounts or higher credit limits. This has helped more than 16 million married individuals who do not work outside the home access necessary credit.

 

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The Race-Based Mortgage Penalty

MARCH 7, 2018 | https://www.nytimes.com/2018/03/07/opinion/mortage-minority-income.html

As the Trump administration begins to gut federal enforcement of civil rights laws, minority communities that were targets for predatory home loans before the recession have become vulnerable yet again to mortgage discrimination. This time, many banks are simply writing off communities of color and denying them loans at all.

An alarming new study by the Center for Investigative Reporting’s online publication Reveal found that African-Americans and Latinos were far more likely to be denied conventional mortgages than whites even when income, loan size and other factors were taken into account. The study examined 31 million mortgage records and found disturbing evidence in 61 metropolitan areas, including Atlanta, Detroit, Philadelphia, St. Louis and San Antonio. African-Americans faced their worst obstacles in the South — Mobile, Ala.; Greenville, N.C.; and Gainesville, Fla. — and Latinos in Iowa City.

Black applicants were disproportionately turned away, as compared to whites, in 48 metropolitan areas, Latinos in 25, Asian-Americans in nine and Native Americans in three areas. In Washington, D.C., the study found that all four groups were far more likely to be denied home loans than were whites.

In Philadelphia, whites received 10 times as many conventional mortgage loans as African-Americans during 2015 and 2016, even though the two groups reside in the city in roughly equal numbers.

Banks have subverted the purpose of the Community Reinvestment Act of 1977, which was supposed to get them to lend and invest more, and open more branches, in low- and moderate-income areas. This was to correct decades of damage the federal government caused by encouraging lenders to ignore black areas until the passage of the federal Fair Housing Act in 1968. The Reveal study found that affordable mortgages issued in historically black neighborhoods to comply with the reinvestment act were going to white newcomers instead of longtime black residents. This has accelerated a pattern of gentrification that forces out black residents.

These problems are rampant throughout the United States. Three years ago, for example, a striking study commissioned by the city of Richmond, Va., found that black applicants were less likely to receive home purchase loans or refinance loans regardless of their incomes.

Upper-income black people were even more likely to be denied loans, as compared to similarly situated whites, than lower income black people were to their white counterparts. This underscored yet again that African-Americans cannot escape economic discrimination simply by becoming wealthier, especially when financial institutions persist in punishing them for living in majority minority neighborhoods. A destructive bill pending in the Senate would deepen this problem by exempting 85 percent of banks from reporting mortgage data that allows regulators and fair housing groups to ensure that home loans are being issued in a nondiscriminatory way.

By denying African-American families mortgage credit, the financial industry also denies them the opportunity to accumulate household wealth — part of the reason that white median family net worth is nearly 10 times that of black families. Beyond that, the decision to withhold credit from minority neighborhoods has turned too many of them into hollowed-out areas with high poverty, failing schools, lower property values and a markedly worse quality of life.

Not long ago, fair housing groups that uncovered particularly egregious lending discrimination by banks and mortgage companies could count on federal regulators to curb, at least, the worst forms of predation. But with the federal government rolling back enforcement, state attorneys general will need to band together the way they did to fight off predatory for-profit schools that saddled students with crushing debt for useless degrees.

Banks often claim that they deny mortgages in minority communities based on credit scores — but that claim is almost impossible to check, given that the credit scores are not publicly available. Beyond that, the credit scores used in the mortgage process work against minority applicants by not taking into account data on how reliably they pay rent, utility and cellphone bills. A bill pending in the Senate would open the door for the mortgage industry to use an alternative credit-scoring system, which would be one step in the right direction.