Lending in the Dark: Local Newspaper Closures and Discrimination in Mortgage Lending

 

"Lending in the Dark: Local Newspaper Closures and Discrimination in Mortgage Lending," by Tran Huynhl. IMPRESSUM Jena Economics Research Papers. January, 2025. Friedrich-Schiller-University Jena. https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2025-0002.

This paper examines the extent to which local newspaper closures affect discrimination against minority borrowers in mortgage lending. Following a newspaper closure, interest rate differentials between minority (black or Hispanic) and comparable non-minority borrowers increase by 5.5 basis points, widening the existing gap in mortgage outcomes between the two groups. This effect cannot be explained by differences in credit risk or underlying economic conditions. The findings suggest that the local press plays an important role in monitoring lending practices and reducing information asymmetries in the mortgage market.

Using a difference-in-differences methodology that exploits the staggered closure of U.S. local newspapers between 2018-2021, and a significant increase in discriminatory lending practices following a local newspaper closure. Specifically, the mortgage rate gap between minority (black or Hispanic) and comparable non-minority borrowers increases by about 5.5 basis points (bps) on average in the three years following a newspaper closure. This widening gap in mortgage rates suggests that minority borrowers face higher lending rates when local media scrutiny is reduced. A rich set of borrower and loan controls (e.g. credit score, income, LTV ratio, loan amount, ...) provides evidence that this effect is not due to differences in borrower creditworthiness or loan structure. Local information vacuums created by newspaper closures can lead to costly borrowing decisions by minority borrowers, thereby exacerbating racial and ethnic disparities in mortgage outcomes.

There are two main channels through which newspaper closures could affect discrimination against minority borrowers. First, a fundamental responsibility of the news media, known as the watchdog role, is to monitor local political, economic and social issues (Dyck et al. 2008; Snyder & Stromberg 2010; Bennett & Serrin 2005). Since the early twentieth century, local newspapers in the US have reported on racial segregation and bank redlining in their neighborhoods, where minority borrowers were denied access to mortgages or subjected to unfavorable terms through subprime loan contracts (Rothstein 2017; Carroll 2017). Early newspaper reports of such discriminatory lending practices were the main force driving academic research into the issue (Black 2023).1 As evidence of racial and ethnic disparities in mortgage. The seminal studies by Black et al. (1978) and Munnell et al. (1996) were among the first to use statistical techniques and models to examine lending discrimination on the basis of race. outcomes became more concrete and widespread in the news and in academic studies, several anti-discrimination laws and regulations were enacted, notably the Fair Housing Act (FHA) of 1968, the Equal Credit Opportunity Act (ECOA) of 1974, the Home Mortgage Disclosure Act (HMDA) of 1975, and the Community Reinvestment Act (CRA) of 1977. Along with bank examiners and consumer protection agencies, local newspapers help monitor lenders to make sure they comply with the law.

The second channel relates to the information intermediation role of the news media (Bushman et al. 2017; Peress 2014; Gao et al. 2020a). Through comprehensive coverage and timely dissemination of local economic trends, housing market dynamics, and regulatory developments, local newspapers provide valuable insights to both borrowers and lenders, thereby reducing  information asymmetries and facilitating transparency in the mortgage market. For example, with accurate information about mortgage products, interest rates, and lending policies, borrowers can make informed decisions and negotiate favorable terms. Most relevant to this context, by documenting and reporting incidents of lending discrimination, local newspapers help raise awareness among minority borrowers about predatory lending and discriminatory practices by certain lenders. As a result, local information vacuums created by newspaper closures can lead to costly borrowing decisions by minority borrowers, thereby exacerbating racial and ethnic disparities in mortgage outcomes.

Algorithmic Governance and Nondiscrimination Rights in the Workplace

 

"Algorithmic Governance and Nondiscrimination Rights in the Workplace," by Kim, Pauline,  (March 16, 2025). Oxford Handbook of Algorithmic Governance and the Law, Forthcoming, Washington University in St. Louis Legal Studies Research Paper No. 25-03-08, Available at SSRN: https://ssrn.com/abstract=5182525 or http://dx.doi.org/10.2139/ssrn.5182525.

This chapter analyzes existing legal responses to the problem of discriminatory algorithms in the workplace. As firms increasingly rely on algorithms or automated decision systems, a type of artificial intelligence, to manage their workforces, concerns have grown that these tools can systematically exclude historically disadvantaged groups. One response is to rely on traditional anti-discrimination law. These laws clearly prohibit certain forms of algorithmic discrimination; however, the complex, opaque nature of algorithms makes identifying and proving discriminatory harms challenging. Another response looks to broader frameworks of data protection and algorithmic regulation to protect against workplace discrimination. These initiatives are promising, but much depends on their details. Individual data rights are of limited usefulness because of the systemic nature of algorithmic discrimination, while broad regulatory oversight can help improve transparency and oversight of these tools.

algorithmic management, employment discrimination, workplace rights, discrimination law, algorithmic governance, data protection, algorithms, artificial intelligence, automated decisionmaking, hiring and selection, disparate treatment, disparate impact, indirect discrimination, duty to accommodate, individual data rights, notice, right of explanation, right of access, right of correction, right to contest

Experts Warn Proposed Cuts to Housing Programs Could Affect Millions

 

The President’s proposal to slash roughly 43% of funding for federal housing programs, like Section 8 vouchers, could have devastating effects for millions of Americans, as the country already faces a housing supply and affordability crisis. The 2026 “skinny budget” proposal, released May 2nd, calls for $26.7 billion in cuts to Section 8 and other housing assistance programs. A new grant, the State Rental Assistance Block Grant, would reallocate the remaining funds for these programs to states to develop their own initiatives. The cuts would affect tenant-based and project-based rental assistance programs, as well as public housing, housing for the elderly, and housing for people with disabilities.

The cuts to federal housing programs would affect about 3.8 million people and worsen the country’s housing crisis, said Eric Oberdorfer, director of policy and legislative affairs at the National Association of Housing and Redevelopment Officials, a professional membership organization and advocacy group. “We are obviously in a significant housing affordability and supply crisis right now, and now is the time to support affordable housing programs,” he said. “Devastating cuts like those proposed in the budget [for] public housing or to Section 8 would directly hurt families, communities and local economies.”

Federal rental assistance programs currently help about 10 million people afford housing, according to the Center on Budget and Policy Priorities. Of that, 2 million receive Section 8 Project-Based Rental Assistance. From January 2023 until January 2024, homelessness surged by 18% to the highest level on record, partially driven by increasing rent costs and a lack of affordable housing. 

Katie Fallon, a principal policy associate at the Urban Institute, said the planned cuts could exacerbate a housing situation that is already grim for millions and is likely to affect the number of new affordable housing units available.

Read the May 6, 2025 Washington Post article.

Read the 2026 "Skinny Budget" proposal.

(Image by freepik.com.)

Book Review: "Foundations of Injustice: From Slave Codes to AI Bias - How Systemic Racism Built America and How We Rebuild Equity"

 

Foundations of Injustice: From Slave Codes to AI Bias - How Systemic Racism Built America and How We Rebuild Equity, by Kwame Amari Freeman. Independently published: March 24, 2025. Paperback, $18.95.

In this urgent and deeply researched work, Kwame Amari Freeman uncovers how systemic racism has been encoded into America’s laws, economy, education, technology, media, and healthcare - from the slave codes of the 1600s to the biased algorithms of today.

What the reader will discover: The origins of race-based laws and colonial hierarchies, How redlining shaped the racial wealth gap, The impact of algorithmic bias in modern tech, Media narratives and policies that sustain racial disparities, Case studies, legal documents, and historical analysis that expose the architecture of inequality, 

Beyond the Problem - A Path to Change: Freeman offers real-world tools and reform strategies: legal and policy frameworks to dismantle systemic racism, Economic and  educational solutions to promote equity, Tech-based approaches to counter bias, and Community-led initiatives and action guides.

Freeman works at University of Massachusetts Boston.

Bipartisan Antisemitism Awareness Act (S. 558) Considered by Congress

On February 13, 2025, the bipartisan Antisemitism Awareness Act (S. 558) was re-introduced in Congress  by sponsor Senator Tim Scott (R-SC) to require the Department of Education to use the International Holocaust Remembrance Alliance (IHRA) working definition of antisemitism when enforcing federal anti-discrimination laws. On April 30, 2025, the Senate Committee on Health, Education, Labor, and Pensions. Committee held a mark up session. The legislation is co-sponsored by 41 Representatives, and endorsed by: ADL (Anti-Defamation League), American Jewish Committee (AJC), Conference of Presidents of American Jewish Organizations (COP), Christians United for Israel (CUFI), Zionist Organization of America (ZOA), Republican Jewish Coalition (RJC), National Jewish Advocacy Center, Jewish Federations of North America (JFNA), Hadassah, The Endowment for Middle East Truth (EMET), Combat Antisemitism Movement (CAM), Union of Orthodox Jewish Congregations of America (OU), The Jewish Federation of Northern New Jersey, and B’nai B’rith. 

On May 2, 2025, the Interfaith Alliance announced its opposition to the Antisemitism Awareness Act (AAA). The Alliance stated that the AAA "would needlessly stifle political free speech and empower the administration’s repressive agenda." The Foundation for Individual Rights and Expression, American-Arab Anti-Discrimination Committee (ADC), American Muslims for Palestine, Council on American-Islamic Relations (CAIR), Center for Constitutional Rights, Defending Rights and Dissent, Jewish Voice for Peace, National Lawyers Guild, Palestine Legal, and US Campaign for Palestinian Rights also oppose the Act.

On February 5, 2025, the Anti-Defamation League (ADL) applauded the re-introduction of the Act. The bipartisan bill, reintroduced in Congress by Rep. Mike Lawler (R-NY), Rep. Josh Gottheimer (D-NJ), Rep. Max Miller (R-OH) and Rep. Jared Moskowitz (D-FL) will ensure the Department of Education has a  clear framework for identifying and addressing antisemitic discrimination, particularly on college and university campuses. “As ADL data shows, antisemitism is at crisis levels in the U.S., creating the urgent need for decisive action,” said Jonathan Greenblatt, CEO of the ADL. “The Antisemitism Awareness Act makes clear that antisemitism, including anti-Zionist harassment, has no place in our schools or society and, importantly, reinforces the IHRA Working Definition of Antisemitism as a critical tool for the U.S. Department of Education. We urge Congress to act swiftly and send a powerful message that combating antisemitism remains a national priority and deeply appreciate the efforts by Reps. Mike Lawler, Josh Gottheimer, Max Miller, and Jared Moskowitz and Sens. Tim Scott and Jacky Rosen to quickly reintroduce this bipartisan bill.”

The AAA would broaden the definition of antisemitism, essentially by defining anti-Zionism as antisemitic for the purposes of civil rights law. The IHRA definition underscores that antisemitism includes denying Jewish self-determination to their ancestral homeland of Israel, holding Jews collectively responsible for actions of the State of Israel, and applying double standards to Israel. The IHRA definition is the most widely recognized definition of antisemitism in the world, having been adopted by more than 40 countries and 35 states across the United States. The bipartisan legislation also provides clear protections for the First Amendment.

Last Congress, the Antisemitism Awareness Act overwhelmingly passed the House of Representatives by a vote of 320-91. The Senate subsequently did not consider the legislation. On November 14, 2024, the ACLU urged senators to reject the Act because it would "censor political speech critical of Israel on college campuses under the guise of addressing antisemitism."

“Since the heinous October 7th attacks on Israel, we have seen an explosion of antisemitic violence and intimidation on college campuses and in communities across New Jersey and the nation. Far too many in our community no longer feel safe in their own homes or classrooms,” said Congressman Josh Gottheimer (NJ-5). “That’s why I’m reintroducing the Antisemitism Awareness Act, which will give state officials and law enforcement a clear framework for identifying and addressing antisemitism to hold harassers accountable. Our bipartisan bill adopts the most widely recognized definition of antisemitism in the world, already used by more than 40 countries and 35 states. Hate and discrimination have no place in New Jersey or the country, and we must act now to protect our Jewish students and families from threats, intimidation, and violence.”

“With Jewish college students still facing unprecedented levels of discrimination, intimidation, harassment, and violence, the need for the Antisemitism Awareness Act remains as urgent as when it was first introduced. CAM has proudly supported the bill from the start, and we commend Representative Lawler for his dogged commitment to seeing the legislative process to the finish and Speaker Johnson for his strong leadership in the fight against rising antisemitism. We urge the new Congress to prioritize rapid passage of the act, and look forward to seeing its positive impact on campuses across the United States,” said the Combat Antisemitism Movement (CAM).

“Hadassah is proud to support the Antisemitism Awareness Act and believes that the Department of Education should leverage the widely used and respected International Holocaust Remembrance Association definition of antisemitism when enforcing anti-discrimination laws. Antisemitism has reached alarming heights and is impacting the lives of Jews young and old. In Hadassah’s recent report, From Fear to Resilience: Women Facing Antisemitism, Jewish women shared stories of how antisemitism is making them feel unsafe and prompting them to drop out of school. We applaud Representatives Lawler, Gottheimer, Miller and Moskowitz for their bipartisan leadership in fighting hatred. We urge Congress to pass this critical legislation,” said Carol Ann Schwartz, National President of Hadassah.

‘We commend Congressman Gottheimer for introducing the Antisemitism Awareness Act, which will help states like New Jersey align with more than 35 other states in adopting a clear, uniform definition of antisemitism. Without this standard, institutions and individuals can evade accountability for fostering hostile environments that target Jews based on their beliefs, values, practices, or heritage. This legislation is a crucial step in ensuring a consistent and effective approach to identifying, addressing, and preventing antisemitism,” said Jason M. Shames, CEO of the Jewish Federation of Northern New Jersey.

Read the Congress.gov summary of the Act.

Read the May 2, 2025 Interfaith Alliance article.

Read the November 14, 2024 ACLU letter opposing the Act.

Home Price Change and Ethno-Racial Residential Segregation

 

," by Alex Mikulas, Brenden Beck, & Max Besbris. 04/10/2025. Socius 10 (2024). https://doi.org/10.1177/23780231241261606, (Original work published 2024).

Although rates of residential racial segregation and home prices are undoubtedly related, the temporal nature of the relationship has rarely been studied. Using fixed effects models in a cross-lagged framework, this study examined how prior changes in segregation and home prices at the metro level predict changes in the other. To examine how prices and ethno-racial segregation are related over time, we gathered data on 398 metropolitan statistical areas (MSAs) for the years 1980, 1990, 2000, 2010, and 2019. 

The findings suggest that increases in home prices predict increasing racial segregation years later, but increases in segregation fail to predict subsequent change in home values. Metros that experience a 1 standard deviation increase in home prices experience an associated 0.25 standard deviation increase in Black-White segregation 10 years later and a 0.18 standard deviation increase 20 years later. No relationship is observed for Hispanic-White segregation. We discuss implications for understanding the economic underpinnings of segregation. Findings also offer insight into future segregation trends and illuminate how changes in the housing market may drive demographic trends more broadly.

Different strands of research have shown how varying rates of appreciation of property values exacerbate racial wealth gaps. Indeed, racial disparities in home equity are the largest component of racial wealth gap. The racial gaps in home value are also larger in more segregated places, and prior work has theorized the relationship between housing value and segregation as a primary way the racial wealth gap is maintained.

Although Black-White segregation continues to fall at a faster rate relative to other race groups’ segregation from White individuals, it is still at the highest overall level compared to other ethno-racial group segregation from White individuals, and mobility patterns do little to bring Black-White segregation to parity with other race groups overall.

In urban settings, Hispanic residents have had near-stable segregation levels from White neighbors but have increasingly shared residential space with Black neighbors over the same time frame (Iceland and Sharp 2013), and metropolitan Hispanic-Black segregation is decreasing at a much faster rate than Hispanic-White segregation.

The findings provide strong evidence that changes in metro-level home prices precede Black-White segregation levels. This is an important and salient point to consider as home prices soar to historic highs across the U.S., suggesting continued or increasing segregation may soon follow.

Chandan Economics "Research 2025 Report" Finds Consistent Racial Inequalities

 

Racial Inequities in US Housing: 2025 Report. The Chandan Economics Research Team. January 28, 2025. 

The Chandan Economics Racial Inequities in U.S. Housing Report is a multi-themed overview of the contrasting housing and wealth outcomes among commonly referenced racial or ethnic groups in the United States. Our analysis explores the housing outcomes of racial groups within four focus areas: Housing Affordability, Household Wealth, Credit Access and Investment, and Housing and Environmental Quality. The annual report provides a snapshot of the historical intersection between racial disparities in housing outcomes and inequities in other socioeconomic dimensions, such as education, wealth and upward mobility, health, and access to financial markets.

The major findings of the Report are:

(1) Home price and rent increases over the past decade have disproportionately impacted cost-burdened and minority households.

According to a 2022 report from Up for Growth, roughly 92% of Latino [4] Households living in a metropolitan statistical Area (MSA) - 51 million people - live in a market experiencing housing underproduction. Such underproduction can lead to household crowding, resulting in fewer individuals purchasing homes and taking advantage of the home equity appreciation homeowners typically enjoy.

(2) The homeownership gap between White and minority-led households declined modestly during the pandemic years but remains at a 28.5 percentage point gap. Despite the dismantling of many discriminatory lending and underwriting practices over the last several decades, the gap between White and Black homeownership is wider today than it was before the civil rights era. In 1960, the White homeownership rate was 65%, and the Black homeownership rate was 38% - a 27-percentage point gap. Homeownership rates broadly declined across all races and ethnicities in the decade following the Great Financial Crisis (GFC). Still, the gap widened as Black and Hispanic households were more than twice as likely than non-Hispanic White households to receive a sub-prime loan during the housing bubble - exacerbating the crisis’s impact in minority-majority communities.

(3) The share of minorities without a bank account has fallen since the Great Financial Crisis but remains measurably above the unbanked rate among White Households. Unbanked rates among Native American and Alaskan Native households have also decreased substantially across this period but experienced an upswing between 2015-2017 and again after 2021. Native American and Alaskan Native households remain the highest unbanked racial cohort at 12.2%.

(4) Several indicators of public health and environmental quality remain worse in historically redlined areas.

(5) The racial gap in credit access is significantly higher when measuring the share of the population that receives prime credit rates. Asian and White Americans have significantly higher proportions of prime borrowers, representing 62% and 51% of their respective populations. The share drops steeply for Hispanic and Black Americans, with 29% and 20% of the population receiving prime rates, respectively. Similarly, just 24% of those identifying as all other racial groups have access to prime rates.