Racial Bias in Mortgage Biz? New Data Says No, Researchers Find

By Randall Bloomquist In the mortgage public-policy cosmos, studies alleging racial bias in lending are like comets. They blaze across the industry skyline on a regular basis, drawing attention from the media and outrage from fair housing activists. The latest flare came from a report alleging Black applicants are nearly twice as likely to be denied a conventional mortgage as compared to White applicants with similar financial profiles. The study, which claims to advance the case for widespread lending discrimination through the analysis of newly available data about loan applicants, was generated by the non-profit investigative website The Mark-Up in partnership with the Associated Press. But according to some industry analysts, The Mark-Up’s j’accuse! moment comes up short. Those data crunchers say the…

Townstone Hits Back At CFPB Over Redlining Lawsuit

Lawyers for the Chicago mortgage company Townstone Financial accused the Consumer Financial Protection Bureau of targeting their client because of their political views – and not their business practices, as laid out by the agency earlier this week. Specifically, the lawyers say, “(CFPB Director Kathy) Kraninger is saying in this lawsuit that financial institutions are engaging in unlawful discrimination if they advertise too much on conservative media, or if their owners, executives, or staff express conservative political viewpoints, such as statements in support of the police. This is the next step in the left’s `cancel culture.’” On Wednesday, the CFPB filed a lawsuit against Townstone for allegedly discouraging Black applicants from applying for loans while engaging in redlining by discouraging…

Redlining Legacy: Reduced Wealth In Black Community

By Jim Perskie More than 50 years after redlining was outlawed, the practice still has a profound impact on the wealth and property values in neighborhoods across the country, according to a report released by Redfin on Thursday. The typical homeowner in a neighborhood that was “redlined” for mortgage lending by the federal government has gained 52 percent less – or $212,023 – in personal wealth generated by property value increases than those in greenlined neighborhoods over the last 40 years. “More than half a century after it was abolished, redlining continues to dictate the racial makeup of neighborhoods and Black families still feel the socioeconomic effects of such a discriminatory housing policy,” Redfin chief economist Daryl Fairweather said. Redlining is…

FDIC Balks As OCC Announces Redlining Rule Update

The Federal Deposit Insurance Corporation said Wednesday it will not move forward with revisions to the nation’s anti-redlining law announced moments earlier by the Comptroller of the Currency. Comptroller of the Currency Joseph M. Otting announced the finalization of a rule to “strengthen and modernize Community Reinvestment Act (CRA) regulations,” saying the rule would make “CRA work better for everyone.” But the FDIC – which has joint rulemaking authority with the OCC over the law – responded from Chairman Jelena McWilliams moments later, telling banks its focus is on the coronavirus response and not changes to the CRA.  “While the FDIC strongly supports the efforts to make the CRA rules clearer, more transparent, and less subjective, the agency is not…