By Tyler Ray, ACLU Washington Legislative Office at 11:30am
For years, Rita Winters envisioned spending her golden years of retirement at her dream house in Southern Maryland. However, as a result of events outside of Rita’s control, her dream home placed her in a nightmare situation. Federal action is needed to stop the nightmare that Rita and millions others faced while attempting to achieve their dream of home ownership.
On Monday, the American Civil Liberties Union filed a lawsuit against Morgan Stanley in what may become the most important civil rights case in a generation. If successful, the implications of this suit are profound and the impact could be staggering, both in addressing the damages suffered by devastated communities as a result of predatory lending triggering the foreclosure crisis and the symbolic importance of framing these damages as civil rights violations.
The economic crisis of 2008, which was devastating for the nation’s economy as a whole, was nothing short of disastrous for communities of color. Much of the decades of progress toward full inclusion in the American dream which was ushered in by the landmark civil rights laws of the 1960’s disappeared virtually overnight, stripping communities of color of their homes and their financial futures. These enormous setbacks were not the result of a natural disaster but were instead the easily foreseeable consequences of forces set in motion by banks eager to realize enormous profits without regard to the impact upon vulnerable communities.
By Ian S. Thompson, ACLU Washington Legislative Office at 11:33am
This morning, Sen. John Kerry (D-Mass.) and Rep. Jerrold Nadler (D-N.Y.) introduced the Housing Opportunities Made Equal (HOME) Act in the Senate and House. This legislation would, among other things, amend both the Fair Housing Act and the Equal Credit Opportunity Act to prohibit discrimination on the basis of sexual orientation or gender identity in housing and credit. It would help to expand the numbers of Americans who have equal access to credit, home lending, the home rental market, and the home sales market.
The editorial page of the New York Times recently weighed in on an important but underappreciated aspect of the financial crisis: The systematic targeting of communities of color for risky and unfair loans. As the Timesput it:
Pricing discrimination — illegally charging minority customers more for loans and other services than similarly qualified whites are charged — is a longstanding problem. It grew to outrageous proportions during the bubble years. Studies by consumer advocates found that large numbers of minority borrowers who were eligible for affordable, traditional loans were routinely steered toward ruinously priced subprime loans that they would never be able to repay.
Rampant lending discrimination during the housing bubble exposed black and Latino communities to the harshest consequences of the economic crisis. The link between race, subprime lending, and devastating rates of foreclosure has been crystal clear for some time. Researches at Princeton have found, for example, that "the greater the degree of Hispanic and especially black segregation a metropolitan area exhibits, the higher the number and rate of foreclosures it experiences." That same study found that these disparities are due in large part to the disproportionate chance that minority borrowers will receive subprime loans.
