46th Anniversary of Community Reinvestment Act (CRA)

 Important Law Against Lending Discrimination Celebrated

The following is from an October 12, 2023 email blast from the National Community Reinvestment Coalition (NCRC) which works to lessen mortgage lending discrimination.

Tomorrow, October 12, the Community Reinvestment Act (CRA) turns 46! As we excitedly await the new federal rule that is both long overdue and essential, we reflect upon what CRA has done in the last four decades, and what it could do for underserved communities all across America with the proper updates and modernization.  Join us tomorrow, all day across all social media platforms, as we acknowledge and celebrate the Community Reinvestment Act. Here are some sample messages and graphic to encourage your participation.

CRA Birthday Toolkit

CRA requires banks to meet the credit needs of all communities, including LMI areas, consistent with the safety and soundness of the banks’ operations. The law created a framework wherein community organizations, banking regulatory agencies and financial institutions interact in assessing how well a financial institution is meeting the needs of disadvantaged communities. This framework has proven critical in promoting greater investment and service in areas that banks might otherwise disregard.    NCRC and our members have used the CRA to negotiate community benefits agreements (CBAs) with 21 different banks, totaling over $574 billion in loans and investments for affordable housing, small businesses, economic development and bank branches in low- and moderate-income neighborhoods and communities of color.   Let’s celebrate CRA and encourage the banking regulators to release the rule we have all been waiting for!   Thanks for all that you do, Team NCRC

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National Community Reinvestment Coalition 740 15th St NW, Suite 400 Washington,DC 20005

Massachusetts Study of Housing Mobility Program Finds Positive Results

 "Supporting Neighborhood Opportunity in Massachusetts: A Study of Housing Mobility Program Outcomes (June 2023)"

The Supporting Neighborhood Opportunity in Massachusetts ("SNO Mass") program is a statewide housing mobility program, developed by the Massachusetts Executive Office of Housing and Liveable Communities (EOHLC)1 in 2019 for families with rental subsidies through EOHLC’s federally funded Housing Choice Voucher (HCV) Program. SNO Mass offers housing counseling, financial assistance, and landlord incentives to expand housing choice and assist interested families in moving to “high opportunity” neighborhoods. To some extent, the HCV Program is a successor to HUD's Moving to Opportunity Program.

As of July 2023, 125 Massachusetts families (with a total of 270 children) have moved to higher-opportunity neighborhoods as a result of SNO Mass. Interviews with several of these families confirmed that moving has had a largely positive impact on both parents and children. 

Most participants report they are very pleased with their new home and community, and identify specific ways in which their lives and their children’s lives have improved since they moved. While these early results are encouraging, more work is needed to ensure that more families (within and beyond the SNO Mass program) are able to move to high-opportunity neighborhoods. This is a potential model program for other states.

Read the Full Report  and Executive Summary.

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Source: Poverty & Race Research Action Council (PRRAC), https://www.prrac.org/supporting-neighborhood-opportunity-in-massachusetts-a-study-of-housing-mobility-program-outcomes/.

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Fed Regulator Warns AI & Machine Learning Can Worsen Lending Bias

AI & Automated Decisions Determine Credit Rating, Loan Terms, Hiring, Housing, etc. 

“While these technologies have enormous potential, they also carry risks of violating fair lending laws and perpetuating the very disparities that they have the potential to address,” the Fed’s vice chair of supervision, Michael Barr, said at the recent National Fair Housing Alliance (NFHA) 2023 national conference. While new artificial intelligence tools could cheaply expand credit to more people, machine learning and AI may also worsen bias or inaccuracies inherent in data used to train the systems or make inaccurate predictions.

As concerns grow over increasingly powerful artificial intelligence systems like ChatGPT, the nation’s financial watchdog says it’s working to ensure that companies follow the law when they’re using AI. Automated systems and algorithms help determine credit ratings, loan terms, bank account fees, and other aspects of our financial lives. AI also affects hiring, housing and working conditions.

In the past year, the Consumer Finance Protection Bureau said it has fined banks over mismanaged automated systems that resulted in wrongful home foreclosures, car repossessions, and lost benefit payments, after the institutions relied on new technology and faulty algorithms.

One problem is transparency. Under the Fair Credit Reporting Act and Equal Credit Opportunity Act, for example, financial providers legally must explain any adverse credit decision. Those regulations likewise apply to decisions made about housing and employment. Where AI make decisions in ways that are too opaque to explain, regulators say the algorithms shouldn’t be used. “I think there was a sense that, ‘Oh, let’s just give it to the robots and there will be no more discrimination,’” Chopra said. “I think the learning is that that actually isn’t true at all. In some ways the bias is built into the data.”

EEOC Chair Charlotte Burrows said there will be enforcement against AI hiring technology that screens out job applicants with disabilities, for example, as well as so-called “bossware” that illegally surveils workers. The Fed recently announced two policy initiatives to address appraisal discrimination in mortgage transactions. Under the proposed rule, institutions that engage in certain credit decisions would be required to adopt policies, practices, and control systems that guarantee a “high level of confidence” in automated estimates and protect against data manipulation.

In April, 2023, about one-fourth of federal agencies, including the Federal Trade Commission and the Department of Justice, announced their commitment to cracking down on automated systems that cause harmful business practices.

Sam Altman, the head of OpenAI, which makes ChatGPT, said government intervention “will be critical to mitigate the risks of increasingly powerful” AI systems, suggesting the formation of a U.S. or global agency to license and regulate the technology. The Electronic Privacy Information Center said the agencies should do more to study and publish information on the relevant AI markets, how the industry is working, who the biggest players are, and how the information collected is being used - like regulators have done with previous new consumer finance products and technologies.

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Read the July 19, 2023 The Hill article.

Read the June 15, 2023 Federal Times article.

US District Court Judges are Mostly White

25 of the 94 Federal District Courts have Never Had a Non-White Judge - Including Pennsylvania Middle and All New England States

According to a recent Bloomberg Law analysis of federal court records, 8 states in the South and 15 from the Northeast to the upper Great Plains have courts that never have had a non-White judge. While there are not any formal requirements to be considered for a federal judgeship, many trial court judges come from major law firms, US attorney’s offices, or were already judges in other courts. Black Americans have historically been underrepresented in those jobs in many states. 

President Barack Obama significantly diversified the federal courts: about one-fifth of his judicial appointees were Black, and President Joe Biden already has done more. He has gotten confirmed a far higher percentage of women (67.1%) than President Donald Trump (23.9%) or President Barack Obama (41.9%). Overall, 66% of Biden’s nominees have been people of color, according to the White House. Some 30% of Biden’s confirmed judges have been African American, compared to 3.9% under Trump and 17.9% under Obama. 

Many Black lawyers have not had the elite professional experiences and political connections that help elevate White lawyers to the US bench, according to local Black lawyers. The result is a major deficit in the administration of justice on the court when ever-deepening political polarization has increased the power of a single district judge. Their rulings at the trial district court level frequently start high-profile battles over immigration, public health, criminal justice, and other contentious social issues.

One example of the impact of the proportionate deficit of black judges is the Southern District of Georgia - the cities of Savannah and Augusta and 43 counties on the coast and in state’s southeastern corner. Nearly one-third of the district’s residents are Black, making it the most diverse of any judicial district that has only ever had White judges. There is a disproportionate number of Black criminal defendants, at times 70% to 80% of the defendants charged were people of color. 

Research is mixed on how a judge’s racial identity impacts their decision-making in criminal cases. Some studies have found that Black judges are more punitive though others are not. One former prosecutor said to avoid disproportionate harm to some communities, the justice system needs to reflect a diversity of life experiences and perspectives.

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Read the September 5, 2023 Bloomberg Law News article.

Read the July 30, 2023 Washington Post article.

Banks & Realtors Urge US Agencies to Change Home Appraisal Process

Regulators Seek Standardized Home Appraisal Revaluations as Part of Push to Eliminate Appraisal Bias

Banks and realtors have just urged federal regulators to limit the number of times a potential homebuyer or seller can challenge an appraisal of the property’s value. Mortgage lenders ask independent appraisal firms to reevaluate a home value when a consumer complains that the value is too high or low.

 In June, 2023, Five agencies - the Consumer Financial Protection Bureau, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the National Credit Union Administration - proposed regulations to make it easier for consumers to ask for "reconsiderations of value (ROV)," especially if they suspect racial biases negatively influenced the value first placed on a home.

In response, the National Association of Realtors (NAR) and the Independent Community Bankers of America (ICBA) wrote that permitting consumers to have an unlimited number of new appraisals could muck up the homebuying process. ICBA said that there are more effective ways to reduce bias. NAR urged the agencies to use a program ("the Tidewater process") established by the Veterans Affairs Department (VA) as a way to limit ROV requests by allowing three reconsideration requests on homes purchased with a VA-backed loan.

Consumer advocates - National Consumer Law Center, the National Community Reinvestment Coalition, the Consumer Federation of America, the National Fair Housing Alliance, the National Urban League, and others - mostly supported the proposal, but suggested that regulators should more clearly state that the guidance applies to both under-valuations and over-valuations. The Housing Policy Council, an industry group, said asking the same appraisal company to re-do ignores possible causes of alleged discrimination. Instead of using the original appraiser, regulators should tell banks to use other tools to reevaluate when disputes happen.

Both consumer and industry advocates urged the regulators to consult with the other mortgage agencies and entities that run government-backed housing programs - the Federal Housing Finance Agency, Fannie Mae, Freddie Mac, the VA, and the Department of Agriculture - regarding changes to the appraisal system.

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Read the September 22, 2023 Bloomberg Law News article.

Maryland Virtual Disaster Center for Insurance Assistance Opened

 

Thursday, September 28, 2023 at 12 pm - 2 pm or 5 pm - 7 pm Attendee Zoom Link: https://www.zoomgov.com/j/1603802898 Dial-in: (646) 828-7666 Webinar ID: 160 380 2898  The Maryland Insurance Administration is opening our Virtual Disaster Center to help anyone with insurance related issues or questions about damage from recent weather events. Registration is not required. All are welcome to attend. To view the flyer, please click here.

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HUD Charges New York Landlord with Disability Discrimination

The U.S. Department of Housing and Urban Development (HUD) has charged Lakeview Avenue, LLC (“Lakeview”) in Rensselaer, New York, and its employees with violating the Fair Housing Act by refusing a tenant’s request for a disability-related reasonable accommodation to keep an assistance animal and subjecting the tenant to retaliation for requesting a reasonable accommodation. Read the Charge.

The Fair Housing Act legally outlaws discrimination and retaliation based on disability, including the failing to grant reasonable accommodations and interfering with tenants' rights protected by the Act.

HUD’s charge alleges that Lakeview refused a tenant’s request to allow her disabled child to have an assistance animal in her unit. Though they provided medical documentation documenting the child’s need for the animal, Lakeview still denied the reasonable accommodation and impose onerous and discriminatory conditions. After another request for a reasonable accommodation, the tenant received a notice to vacate her unit and had to move to another, more expensive, apartment within her daughter’s school district

A U. S. Administrative Law Judge will hear HUD’s charge unless any party to the charge elects to have the case heard in federal district court. If an administrative law judge finds, after a hearing, that discrimination has occurred, they may award damages to the individuals for their losses as a result of the discrimination, injunctive relief and other equitable relief to deter further discrimination, payment of attorney fees, and civil penalties. If the federal court hears the case, the judge may also award punitive damages to the Complainants.

People who believe they are the victims of housing discrimination should contact HUD at 800-669-9777 (voice) or 800-927-9275 (TTY). Additional information is available at www.hud.gov/fairhousing. Housing providers and others can learn more about their responsibility to provide reasonable accommodations and reasonable modifications to individuals with disabilities here. Materials and assistance are available for persons with limited English proficiency. Individuals who are deaf or hard of hearing may contact the Department using the Federal Relay Service at 800-877-8339.

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Read the September 25, 2023 HUD release.