WTOP, February 15, 2018: Kept out: loophole in law for the poor spurs gentrification
The Community Reinvestment Act of 1977 was designed to correct the damage of redlining, a now-illegal practice in which the government warned banks away from neighborhoods with high concentrations of immigrants and African Americans. But the law didn’t anticipate a day when historically black neighborhoods would be sought out by young white homeowners. So instead of lending to longtime black residents, most of the loans are going to white newcomers.
The result is nearly all financial institutions nationwide have passed their Community Reinvestment Act inspections since 2009, even though racial disparities in lending remain as pronounced as ever.
Reveal from The Center for Investigative Reporting analyzed 31 million mortgage records made available under the Home Mortgage Disclosure Act and found 61 metro areas across America where people of color – African Americans, Latinos, Asians and Native Americans – were denied conventional home purchase loans at significantly higher rates than whites. That was true even after controlling for nine economic and social factors, including applicants’ income, the size of the loan they sought and the neighborhood where they wanted to buy.
African Americans or Latinos were more likely to be turned away in major metropolitan areas such as Philadelphia, Detroit, Atlanta and Washington and smaller cities such as Iowa City, Iowa; Sumter, South Carolina; Tacoma, Washington; Vallejo, California; and Little Rock, Arkansas.
