Housing Discrimination is Back! Did it Ever Leave?

hudson-city-savings New Orleans      The Community Reinvestment Act (CRA) was passed in 1978 banning racial discrimination in lending.  The Home Mortgage Disclosure Act (HMDA) was passed as well, forcing banks to supply the data on where they approved mortgages and the racial and ethnic information on the borrowers.  Reporting and enforcement is under the jurisdiction of the Federal Reserve banking system.

            This is called redlining.  There have been recent settlements in this area in Buffalo, Milwaukee, Providence, Rochester, and St. Louis.  Hudson City Savings Bank, the 7th largest savings bank in the US and the largest in New Jersey with offices in New York and Connecticut as well, and a merger candidate for the larger M&T Bank Corporation, settled a case with the Department of Justice and the Consumer Financial Protection Bureau without admitting guilt but by agreeing to a fine of over $30 million for discrimination.  The New York Times reported that that “In 2014, Hudson approved 1886 mortgages in the market…federal mortgage data show.  Only 25 went to black borrowers.”  Hudson claimed innocence, arguing that it bought mortgages on the secondary market, that the bank felt was sufficient to satisfy its CRA obligations.   Attention to the discrimination was brought to the authorities by New Jersey Citizen Action and that’s about the only good news in any of this.

            The bank’s argument is perverse.  They seem to believe that racial discrimination can be handled like climate change with a “cap-and-trade” type agreement where it is alright to discriminate in your home markets, just like you can pollute in your home countries, as long as you purchase an offset in some other way by buying mortgages or helping protect a rain forest.  What a load of hooey!  I’m also troubled about the non-existent role of the Federal Reserve in the Hudson story, especially because any pending merger like the one playing out with M&T would have triggered a review by the Fed on the CRA banking record and requirements.  Without a doubt the CRA has been steadily weakened over the last almost forty years, but has the Federal Reserve decided to be completely derelict in their duty and shuffle this over to no one or by luck have some other agencies like the CFPB and the DOJ pick up the slack.  This is not reassuring.

            Nor is it uncommon.  Without data or taking the time to collect and study it when it is available, it becomes easy to simply say with the banks that there is no discrimination.  I heard that repeatedly in the United Kingdom when discussing the need for a CRA and HMDA for British banking.  Data now exists that allows some evaluation of credit, mortgage, and small business loans in the UK, but the initial reactions have been ho-hum, indicating no surprise that there is more action on lending in higher income areas than lower income ones.  The finer data is not available, and the raw data is deliberately opaque.

            As long as there are bankers that will welcome deposits from lower income families and minorities and still maintain that they have no community responsibility, even though they are chartered with such obligations, and justify their practice based on aversion to risks rather than embracing more robust and generalized rewards, there will be discrimination. There’s always smoke, we just need to make sure that many are still also continually looking for the inevitable fire hidden beneath the smokescreens.


Is there a National Tenants’ Union in Britain’s Future?

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shared housing in London

New Orleans    It was impossible to go anywhere in the United Kingdom without hearing of the woes of tenants and the escalating housing crisis that has gripped young families, workers, and pretty much anyone but the big whoops, particularly outside of the north of England. 

Stories abounded.  Rents being paid for pantries and garden sheds.  Dozens of young people in London not simply overcrowded but living in shifts and sharing beds if one works at night and the other during the day.  Rents routinely taking up to half of someone’s paycheck.  Not that I can’t hear and read similar stories in New York City and San Francisco and other overheated housing markets especially given the stagnation in wages.

Everywhere ACORN is organizing in the United Kingdom there are lots of issues coming from the local groups as they are being formed, but invariably the desperate and tenuous situation for tenants is either at or near the top.  “No fault” evictions leading to displacement, little security of tenure, failure to make repairs, mold, and the list seems to go on and on. 

ACORN’s ethical charter campaign success in Bristol and the living rent campaign in Scotland all have attracted attention, support with efforts rising in other ACORN cities in the UK and by other groups.  Talking with Betsy Dilmer, the director of Generation Rent, who has been campaigning around tenant issues for several years, before catching the Underground for the airport, her travels around the country have convinced her that there is a lot of opportunity for a tenants’ movement to build now, if the alliances and resources could be cobbled together.

Those obstacles are huge in themselves, but there are two others that though they are less concrete would also be mountains to climb towards success:  achieving a consensus on what would define victory for a tenants’ movement and embedding a broad sense of entitlement in tenants’ rights sufficient to propel the fight.  Given the aggressive moves by the newly elected Conservative government, it would be a grand fight to wage.  It’s not hard to see concessions that might be won with a mass-base and aggressive tactics along the lines emerging in Scotland, but moving that base without a deeper commitment to rights-based activity might be harder.

The scarcity of decent, affordable housing is so acute that even those who know they have the right to a six-month lease are unwilling to demand it, knowing there is a line of other wannabe tenants standing behind them if they seem to be anything other than model tenants.  I listened to numerous folks talking over a cup of tea or a pint about their interview “strategies” to find flats in such a tight market.  There is no balance in the market now, and “no fault” evictions would allow landlords to easily rid themselves of activists making needling demands for repairs and minimum standards of habitability. 

In organizing welfare recipients in the National Welfare Rights Organization, we first had to have people accept that they had rights and could be protected from retaliation.  The National Tenants’ Organization was organizing at the same time under a patchwork of local and state regulations for private tenants with only protections where people were in federally subsidized housing.  NTO despite some promising campaigns and popular support was never able to get the kind of traction it needed and the legacy in the United States is the continued whip hand held by landlords.

Nothing in this work is easy, but a national tenants’ organization or union in the United Kingdom would rank among the more difficult organizing challenges available there these days.