Last week, the NAACP filed a lawsuit in U.S. District Court against two of the country’s largest lenders alleging systemic, institutionalized racism in mortgage lending practices. The lawsuit alleges that Wells Fargo and HSBC purposefully steered people of color towards higher cost, risky loans.
According to the lawsuit, lenders named in this suit and a companion suit filed by the NAACP made high cost sub-prime loans to qualified African Americans 54% of the time compared to 23% for Caucasians. African-Americans were disproportionately steered into these loans even when credit scores, income, and down payment were equal to that of Caucasians.
Study Finds People of Color Bear Heaviest Burden in Recession
A new study from the Center for Social Inclusion says that people of color are bearing the heaviest burden in the recession. Looking at the New York metropolitan area as a microcosm for the nation, the authors argue infrastructure, job creation, and other services have been denied to communities of color.
Discussing the study on Democracy Now! and the sub-prime crisis, Maya Wiley said:
“…imagine if we had had a financing system where people actually fairly got the loans that they should get. Most of those are people of color. And even when you look at the expansion of the subprime industry, a lot of it was around the fact that communities of color didn’t have fair access to credit. So we’re in this mess in part because we didn’t look at the warning signs. The warning signs for our economy were in communities of color. We tend to be first–hit first and hit hardest.”
A study earlier this year backed up this assertion, finding that people of color were experiencing a recession considerably earlier than the rest of the country.