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This single-panel hearing will have the following witnesses:
• Jaime Weisberg, Senior Campaign Analyst, Association for Neighborhood and Housing
Development (ANHD)
• Annetta Seecharranm, Executive Director, Chhaya CDC
• Cathie Mahon, President and Chief Executive Officer, Inclusiv
• Noel Andrés Poyo, Executive Director, National Association For Latino Community Asset
Builders (NALCAB)
• Bruce Marks, Chief Executive Officer, Neighborhood Assistance Corporation of America
(NACA)
• Kim Saunders, President and Chief Executive Officer, National Bankers Association (NBA)
Purpose
The House Financial Services Subcommittee on Consumer Protection and Financial Institutions
will hold a field hearing in Queens, New York on modern-day redlining and its implications on unbanked and under-banked communities. The hearing will address many of the findings from the Center for Investigative Reporting’s Reveal investigative study on bank discrimination in lending,
as well as a more recent Newsday investigative report on redlining in Long Island, and a series of Consumer Protection and Financial Institutions Subcommittee hearings on the Community Reinvestment Act (CRA) and minority depository institutions (MDIs):
• 4/19/19 hearing on “The Community Reinvestment Act: Assessing the Law’s Impact on
Discrimination and Redlining”;
• 10/22/19 hearing on “An Examination of the Decline of Minority Depository Institutions and the
Impact on Underserved Communities”;
• 11/20/19 hearing on “An Examination of Regulators’ Efforts to Preserve and Promote Minority
Depository Institutions”;
• 1/14/20 hearing on “The Community Reinvestment Act: Reviewing Who Wins and Who Loses
with Comptroller Otting’s Proposal.”
Many residents of low- and moderate-income communities, and communities of color in New
York, live in banking deserts, limiting residents’ access to financial products and services. Minority banks, credit unions, and Community Development Financial Institutions (CDFIs) play an important role in reaching under-served communities, as do community advocacy groups. Policymakers and community reinvestment advocates have raised concerns that the Office of the Comptroller of the Currency’s (OCC) proposed reforms to the Community Reinvestment Act (CRA) will threaten unbanked and underbanked communities such as Queens, NY, by removing incentives for maintaining and expanding branch networks in these communities, discounting CRA credit for mortgage origination, and undermining community development investments.
Investigative Reports on Modern-Day Redlining and Banking Discrimination
Extensive research has confirmed continued patterns of discrimination in banking. For instance,
a comprehensive report by the Center for Investigative Reporting found persistent discrimination in
mortgage lending, and that “black applicants were turned away at significantly higher rates than whites in cities, Latinos in 25, Asians in nine and Native Americans in three.” Similarly, extensive mystery shopper research found that loan officers from non-minority banks systematically discriminate against minority small businesses, including that, compared with minority testers, white testers were more frequently provided product information on loan fees (59.1% vs. 25.9%). Furthermore, minorities were more frequently asked to provide financial statements (82.8% vs. 50.0%), tax returns (86.2% vs. 52.4%), personal savings and investments (60.5% vs. 21.7%), credit card debt (42.5% vs. 13.0%), and auto loan debt (32.5% vs. 8.7%). Finally, minorities were less frequently offered help to complete the loan application (18.18% vs. 59.1%), were less frequently offered a business card (42.9% vs. 81.8%), and were less frequently offered help with future banking needs (42.9% vs. 68.2%). Finally, a three-year investigative report by Newsday of Long Island’s leading residential real estate brokers found extensive evidence of steering prospective home buyers based on race and ethnicity, consistent with outlawed redlining practices. Persistent discrimination in banking, and continued practices consistent with redlining, contribute significantly to the difficulties that minorities face in accessing capital and achieving
scale, and help perpetuate the racial wealth gap in America.
Hearing page:
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