CFPB funding is constitutional, Second Circuit court rules

The United States Court of Appeals for the Second Circuit, comprising the districts of Connecticut, New York and Vermont, decided on Thursday that the funding provisions for the Consumer Financial Protection Bureau (CFPB) are constitutional.

Click here for FULL STORY in the Housing Wire.

 

DOJ Secures Over $31 Million from City National Bank to Address Lending Bias Allegations

Largest Redlining Settlement Agreement in Justice Department History; Department’s Combating Redlining Initiative Secured Over $75 Million for Neighborhoods of Color to Date

The Justice Department announced today an agreement to resolve allegations that City National Bank (City National) engaged in a pattern or practice of lending discrimination by “redlining” in Los Angeles County. City National is the largest bank headquartered in Los Angeles and among the 50largest banks in the United States. This resolution will include over $31 million in relief to impacted individuals and communities. The agreement, which is part of the Department’s nationwide Combating Redlining Initiative that Attorney General Merrick B. Garland launched in October 2021, represents the largest redlining settlement in its history.

“Fifteen months after I vowed that the Justice Department would be aggressively stepping up our efforts to combat discriminatory practices in the housing market, we have today secured the largest redlining settlement in Department history,” said Attorney General Merrick B. Garland. “So far, the Combating Redlining Initiative has secured over $75 million dollars in relief for communities that have suffered from lending discrimination. The Justice Department will continue to build on our efforts to vigorously enforce federal fair lending laws and work to ensure that financial institutions provide equal opportunity for every American to obtain credit. In advance of what would have been Dr. Martin Luther King Jr.’s 94th birthday, it is a fitting time to reaffirm our commitment to that work, and to the pursuit of justice for all Americans.”

“This settlement is historic, marking the largest settlement ever secured by the Justice Department against a bank engaged in unlawful redlining,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement embodies Dr. Martin Luther King Jr.’s commitment to fighting economic injustice and ensuring that Black Americans and all communities of color are able to access the American dream and freely access the credit needed to purchase a home. Redlining is a practice from a bygone era, runs contrary to the principles of equity and justice, and has no place in our economy today. This settlement should send a strong message to the financial industry that we expect lenders to serve all members of the community and that they will be held accountable when they fail to do so.”

“In the words of Dr. Martin Luther King Jr., the issue of fair housing is a ‘moral issue.’ Thus, ending redlining is a critical step to closing the widening gaps in homeownership and wealth, especially in a city as large and diverse as Los Angeles,” said U.S. Attorney Martin Estrada for the Central District of California. “It is unacceptable that redlining persists into the 21st century, and this case demonstrates our commitment to combat redlining and hold banks and others accountable when they engage in unlawful discrimination. Through this agreement, we are taking a major step forward by removing unlawful and discriminatory barriers in residential mortgage lending, and meeting the credit needs in Los Angeles.”

“Redlining” is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of the residents in those communities. The complaint filed in federal court today alleges that from 2017 through at least 2020, City National avoided providing mortgage lending services to majority-Black and Hispanic neighborhoods in Los Angeles County and discouraged residents in these neighborhoods from obtaining mortgage loans. The complaint also alleges that during that time period other banks received more than six times as many applications in majority-Black and Hispanic neighborhoods in Los Angeles County than City National each year. In addition, City National only opened one branch in a majority-Black and Hispanic neighborhood in the past 20 years, despite having opened or acquired 11 branches during that time period. And unlike at its branches in majority-white areas, City National did not assign any employee to generate mortgage loan applications at that branch.

Under the proposed consent order, which is subject to court approval and was filed today in the U.S. District Court for the Central District of California along with a complaint, City National Bank has agreed to do the following:

  • Invest at least $29.5 million in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods in Los Angeles County; at least $500,000 for advertising and outreach targeted toward the residents of these neighborhoods; at least $500,000 for a consumer financial education program to help increase access to credit for residents; and at least $750,000 for development of community partnerships to provide services that increase access to residential mortgage credit.
  • Open one new branch in a majority-Black and Hispanic neighborhood and evaluate future opportunities for expansion within Los Angeles County; ensure at least four mortgage loan officers are dedicated to serving majority-Black and Hispanic neighborhoods; and employ a full-time Community Lending Manager who will oversee the continued development of lending in majority-Black and Hispanic neighborhoods.
  • Conduct a Community Credit Needs Assessment, a research-based market study, to help identify the needs for financial services for majority-Black and Hispanic census tracts within Los Angeles County.

City National worked cooperatively with the Department to remedy the redlining allegations. In conjunction with this settlement, City National has announced that it is proactively taking steps to expand its lending services in other markets around the country to provide greater access to credit in communities of color. Specifically, City National is working to facilitate additional homeownership opportunities in underserved communities, including by creating a residential mortgage special purpose credit program to cover geographic areas in various locations throughout the country, including New York, Georgia, Nevada, and Tennessee. Additionally, City National is planning to launch a small business lending program that will be aimed at assisting underserved business owners in operating and growing their business.

In October 2021, Attorney General Garland launched the Justice Department’s Combating Redlining Initiative, a coordinated enforcement effort to address this persistent form of discrimination against communities of color. The initiative is expanding the Department’s reach by strengthening partnerships with U.S. Attorneys’ Offices around the country, regulatory partners and its partners in state Attorneys General offices. Since the initiative was launched, the Department has announced five redlining cases and settlements with a combined $75 million in relief for communities that have been the victims of lending discrimination, including a $20 million settlement with Trident Mortgage Company and a $13 million settlement with Lakeland Bank.

Individuals may report lending discrimination by calling the FHC’s  tip line at 561-533-8717 or submitting a report online.

 

Civil Rights and Housing Organizations Applaud HUD’s Release of Critical Fair Housing Rule

Rule is Major Step in Right Direction to Advance Fair and Affordable Housing and Strengthen Communities

Washington, D.C. — The nations leading civil rights and housing policy organizations have issued the following statement applauding HUD for releasing the Proposed Affirmatively Furthering Fair Housing (AFFH) rule:

“Today’s action by U.S Department of Housing and Urban Development (HUD) Secretary Marcia L. Fudge in releasing an updated Affirmatively Furthering Fair Housing (AFFH) proposed rule is an important step toward creating more equitable and affordable housing opportunities and stronger, more viable neighborhoods. Our organizations urged the Biden-Harris administration to prioritize restoring inclusive fair housing rules that were previously weakened or ignored, and that ensure everyone lives in healthy, well-resourced, vibrant communities free from discrimination. This administration committed on day one to address our request and today has taken another step toward fulfilling its promise to advance fair housing.

“This year we commemorate 55 years of the Fair Housing Act. Yet in 2023, residential segregation, housing discrimination, and an affordable housing crisis remain at the core of inequality in the United States. When Congress passed the Fair Housing Act in 1968, it intended for HUD to take active steps to end housing discrimination, eliminate housing segregation and its ill effects, and dismantle systemic racism and inequality to ensure people could have safe and decent housing in vibrant communities. However, a robust framework for enforcing these obligations was not put into place until 2015, finally giving local jurisdictions, public housing authorities, and community stakeholders the process and data needed to identify and redress local barriers to fair housing and equitable opportunity.

“The Fair Housing Act’s AFFH mandate requires  every entity — local governments, states, housing authorities, etc. — receiving federal funding for a housing or urban development purpose, to use those funds, as well as operate all of their programs, in a manner that affirmatively furthers fair housing opportunities. When used appropriately, the Fair Housing Act’s AFFH provision can reduce racial and gender wealth and homeownership gaps; increase the supply of quality accessible and affordable housing; improve educational, health, environmental, and other outcomes; increase economic opportunities; and benefit thousands of communities and millions of people. By addressing structural inequities, we can build a stronger economy, develop and support more affordable housing options, and maintain a check on inflation, as housing is the single largest expense for the average consumer.

“Fair and equitable housing can transform society and create new promises for future generations. We can build a world in which your zip code does not determine your outcome in life. We can foster a society in which every neighborhood is full of the opportunities and resources that people need in order to thrive. We look forward to working with HUD and the entire administration to ensure the final AFFH rule is effective and beneficial to everyone in this nation, and we urge the administration to move forward swiftly with the rulemaking and implementation process.”

This statement was issued jointly by the following organizations:

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The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.

New Report Reveals Record Number of Housing Discrimination Complaints

Highlights Need for More Resources to Tackle Increase in Cases 

Washington, D.C. — The National Fair Housing Alliance (NFHA)’s newly released Fair Housing Trends Report documents the highest number of housing discrimination complaints since the data has been collected. Cases in the United States rose substantially in 2021, even though fewer agencies reported complaint data; this is a sign that the agencies investigating housing discrimination cases need more resources to address these critical problems.  

NFHA began collecting data about fair housing complaints that consumers file with private fair housing groups, the Department of Housing and Urban Development (HUD), the Department of Justice (DOJ), and state and local government agencies 25 years ago. Although seven fewer agencies reported housing discrimination data to NFHA in 2021 than the previous year, there were 2,504 more housing discrimination complaints filed by consumers. The unprecedented number of 31,216 complaints represents an 8.7 percent increase as compared to 2020 when 28,712 fair housing complaints were filed.

NFHA noted that the record number of complaints comes on the heels of four years of unprecedented attacks on fair housing protections from the Trump administration. Former President Donald Trump sought to significantly weaken long-held civil rights provisions like Affirmatively Furthering Fair Housing and Disparate Impact. Trump’s administration also attempted to shield entities using biased algorithms and make it nearly impossible for groups to challenge discriminatory policies among many other efforts to roll back critical protections. 

“Housing discrimination is insidious, and its role in perpetuating racial homeownership and wealth disparities as well as other harms is under-appreciated. While fair housing has always enjoyed bipartisan support, the Trump administration took a different approach. We are still dealing with the results of those harmful actions. The significant increase in the number of discrimination complaints filed with federal and state agencies and nonprofit fair housing organizations is disturbing and should alarm us all. It will take significant resources to turn the tide and give needed support to the groups who are on the ground providing assistance to victims of discrimination,” said Lisa Rice, President and CEO of NFHA. 

The dataset offers a snapshot of the millions of instances of housing discrimination that occur annually. Most cases of housing discrimination go unreported, sometimes because targets of discrimination don’t know where to turn or believe reporting is useless, fearing they won’t get redress or could face eviction by vengeful landlords or retaliation from neighbors and housing providers. Others don’t recognize the signs of discrimination without further investigation. Such has been the case with the high number of homeowners experiencing appraisal bias who see their home values increase dramatically after getting a White friend to pretend to be the owner of the home. 

NFHA has issued trends reports on housing bias regularly since the mid-1990s as part of its mission to educate the public about the nature, extent, and effect of housing discrimination in the U.S. and ways to mitigate it. This report focuses mainly on the seven federally protected classes: race, color, religion, national origin, sex, disability, and familial status. NFHA will continue to monitor data and cases. “Along with an increase in the number of reported housing discrimination complaints, the nation also experienced a rise in hate violence last year, particularly against Asian/Pacific Islander, Black, and Jewish communities. Discrimination and bias harm us all, and we all must be united in stamping it out,” added Rice. 

Private fair housing organizations processed 72.64 percent of all complaints in 2021, more than 2.6 times the number of complaints processed by state, local and federal government agencies combined, according to the report. This continues a pattern of greater enforcement by the private sector and reinforces the need for more funding and resources for private, non-profit groups that provide direct support to survivors of discrimination. These groups investigate complaints, collect data and information about any alleged violations of the law, provide fair housing counseling and education to consumers, and assist consumers in filing complaints with appropriate authorities. 

The 2022 Fair Housing Trends Report also notes that discrimination based on disability accounts for more than half of complaints filed (53.68 percent). The second most reported type of housing discrimination was based on race, with 5,922 or 18.97 percent of all complaints, compared to 16.79 percent in 2020. 

Complaints based on sex, including sexual orientation or gender identity, made up the third most frequent basis of discrimination, with 2,309 complaints or 7.40 percent. Familial status, with 2,261 complaints or 7.24 percent was fourth, and national origin, with 1,774 reported complaints or 5.68 percent, was fifth. Color was the basis of discrimination for 734 complaints or 2.35 percent, and religion was the basis of 382 complaints or 1.22 percent.  

Rental-related housing complaints were the most numerous in 2021, as they have been in previous years. There were 25,501 complaints of rental discrimination filed with non-profit and governmental agencies. Rental transactions are the most frequent housing transaction, and discriminatory aspects of such interactions are easier to identify than other types of transactions, such as lending, insurance, or real estate sales. 

Real estate sales complaints made up 4.51 percent of all housing discrimination cases reported in 2021. There were 1,408 in all, an increase of 660 complaints from 2020 when 747 sales complaints were reported. 

Eighty NFHA member organizations, all of which are private nonprofit fair housing organizations or fair housing programs of legal aid agencies, collected the private agency data presented in this report. Other sources of data are the DOJ, 10 regional HUD offices, and 76 state and local government agencies. Click here to read the full report. Those who believe they have experienced housing discrimination should file a report with their local fair housing agency, local or state government organization, or HUD.  

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The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal housing opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities. 

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