FOR IMMEDIATE RELEASE Contact: Jesse Van Tol (202) 464-2709
January 26, 2009 email@example.com
NCRC Files Civil Rights Complaint Against Standard & Poor’s
injured by rating agency’s role in foreclosure crisis
Washington, DC — The National Community Reinvestment Coalition (NCRC) announced today that is has filed a discrimination complaint against Standard & Poor’s (S&P) with the US Department of Housing & Urban Development (HUD) Office of Fair Housing & Equal Opportunity. The complaint seeks to obtain relief for consumers and communities harmed by the credit rating agency’s allegedly negligent behavior that contributed to crises in both the housing and credit markets. HUD has accepted jurisdiction in complaints previously filed by NCRC against Moody’s and Fitch, two other leading credit rating agencies.
“The credit rating agencies were the enablers-in-chief of the financial crisis, which has resulted in lost wealth and housing opportunities for millions of Americans. Yet nothing has been done to make whole homeowners harmed by the negligence of these financial institutions,” said John Taylor, president and CEO of the National Community Reinvestment Coalition. “The complaint alleges that S&P issued false and inflated ratings for securities backed by problematic high-cost loans and that this has disproportionately had a negative impact on African-American and Latino borrowers,” stated Taylor.
NCRC alleges that the credit rating agencies substantially contributed to the housing and foreclosure crisis in African-American and Latino communities by making public misrepresentations about the soundness and reliability of subprime securities’ ratings.
S&P’s failures harmed the communities served by NCRC, the complaint states, because S&P fueled imprudent mortgage lending and irresponsible secondary market purchases of loans, which contributed to high default and foreclosure rates in violation of the Federal Fair Housing Act.
“There is no legitimate business justification for discriminatory conduct,” stated David Berenbaum, executive vice president of NCRC. “S&P declined to resolve the issues NCRC has brought to light, thus requiring us to pursue other avenues for redress.”
NCRC will consider civil litigation if HUD does not adequately address the issues raised in the complaint through investigation or conciliation of the filing.
Copies of the civil rights complaint are available at www.ncrc.org.