By KIMBERLEY HAAS
Vice President Kamala Harris joined officials from the U.S. Department of Housing and Urban Development on Wednesday to announce the delivery of a plan designed to dismantle racial bias in the home lending and appraisal process.
The Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) Action Plan submitted to President Joe Biden will, when enacted, represent the most wide-ranging set of reforms ever put forward to advance equity in the home appraisal process, according to a press release.
During her speech, Harris described how a home ensures future financial security and peace of mind for families.
“Imagine a young couple that saves enough money to put a down payment on a home. The day they pick up the key is one of excitement and pride. That day, they own a piece of America,” Harris said. “Historically, many communities of color, however, have been prevented from taking full advantage of the wealth-building power of homeownership.”
Harris begins speaking at 10:35 in this YouTube video:
The Action Plan to Advance Property Appraisal and Valuation Equity outlines the historical role of racism in the valuation of residential property, examines the various forms of bias that can appear in residential property valuation practices, and describes how government and industry stakeholders will advance equity through concrete actions and recommendations.
The PAVE Task Force, co-chaired by HUD Secretary Marcia L. Fudge and White House Domestic Policy Advisor Susan Rice, includes senior leaders from thirteen Cabinet and independent agencies as well as components of the Executive Office of the President.
The Task Force membership is comprised of the following officials:
- Secretary of Housing and Urban Development (co-chair)
- White House Domestic Policy Advisor (co-chair)
- Attorney General of the United States
- Secretary of Agriculture
- Secretary of Labor
- Secretary of Veterans Affairs
- Comptroller of the Currency
- Chairman of the Board of Governors of the Federal Reserve
- Chairman of the Federal Deposit Insurance Corporation
- Chairman of the National Credit Union Administration
- Director of the Federal Housing Finance Agency
- Director of the Consumer Financial Protection Bureau
- Executive Director of the Appraisal Subcommittee
President Biden initially announced the creation of the task force on the June 1, 2021, centennial of the Tulsa Race Massacre. He charged federal agencies with evaluating the causes, extent, and consequences of appraisal bias as well as establishing a transformative set of actions to root out inequity.
The plan outlines actions that are aimed at substantially reducing racial bias during home appraisals, including steps federal agencies will take using their existing authorities to enhance oversight and accountability of the appraisal industry and empower homeowners and homebuyers to take action when they receive a valuation that is lower than expected, according to the press release.
“For generations, millions of Black and brown Americans have had their homes valued for less than their white counterparts simply because of the color of their skin or the racial makeup of the neighborhood. Black and brown homeowners in communities just like mine have not felt that they have had a voice or that the Federal government was doing enough to redress the issue of racial bias in the appraisal process,” said Fudge.
Racial bias in the lending and appraisal process has been a hot topic recently, leading to many news reports on the issue.
The Washington Post published an article on Wednesday reporting that black communities are routinely undervalued, even as home prices throughout the country skyrocketed during the COVID-19 pandemic.
State lawmakers in Illinois are considering a bill that would create a task force to look into what is being called a pattern of lowballing appraised values of homes owned by Black people.
According to Dennis Rodkin at Crain’s Chicago Business, homeowners and industry groups have documented widespread examples of the problem in recent years.
Discrimination in banking and lending is being addressed in other ways at the same time the administration announces the new task force.
Last week, the Consumer Financial Protection Bureau released an updated exam manual for evaluating unfair, deceptive, and abusive acts or practices.
Officials said in a press release that discrimination can occur in cases where the conduct may be covered by the Equal Credit Opportunity Act – a fair lending law that covers extensions of credit – as well as instances where it does not.
The example of being denied a checking account due to race was used as an example of a discriminatory practice.
The Neighborhood Assistance Corporation of America announced a lending program for minority-owned businesses this month it calls “Economic Justice Loans.”
The program has the stated goal of helping historically underserved populations build generational wealth.
Email story ideas to Editor Kimberley Haas: [email protected]