Black, Latino, and Native American Indian leaders at an online briefing on the “racial wealth gap” said it will take a tidal wave of public pressure to win passage of legislation outlawing predatory lending and other discriminatory practices in the face of opposition from the banking lobby.
The speakers participated in a June 16 “webinar” sponsored by the Oakland-based Insight Center for Community Economic Development and the Media Consortium on the topic “Closing the Racial Wealth Gap….America’s most glaring economic injustice.” Families of color have only 15 cents of wealth to the white family’s dollar, the Center declares.
That wealth gap is widening as millions of families of color lose jobs, are forced into mortgage foreclosure, and bankruptcy, the speakers charged.
Michael Roberts, President, First Nations Development Institute, said average annual income for American Indians living on reservations is $7,900. “They are having their income taken away from them by predatory lending practices,” he said. “There is still a huge gap in Indian communities lacking access to credit. Over $22 million is drained from Indian communities each year by these practices.”
He debunked the myth that gambling casinos have brought affluence to the 2.1 million American Indians. “Only 198 out of 558 federallly recognized tribes have gaming contracts,” he said. “Most are still struggling with a centuries-long cycle of poverty.”
The result is unemployment and a soaring suicide rate he said.
Avis A. Jones-DeWeever, director of the National Council of Negro Women Research, Public Policy, and Information Center said Black women are 2.5 times more likely to receive high cost loans as their white counterparts. They are now facing a plague of mortgage foreclosures and the loss of billions in home equity, the main form of accumulating personal wealth, she said.
“One third of Black families could fall out of the middle class. These are people who played by the rules,” she said. “Middle class Blacks have helped support their extended families. What happens when these families lose it all? What happens to their children when they put their college plans on the back burner? How do these families pick up the pieces? How and when?”
The losses in family wealth for all families is “tragic, incalculable,” she added, “$12 trillion that will not be passed down to the next generation.” She called on Congress and the Obama Administration to strengthen the Community Reinvestment Act of 1977 to “close loopholes” that allowed banks and financial institutions to engage in deceptive practices floating millions of subprime predatory loans.
While praising Obama’s economic stimulus package she added that African American communities need “direct targeting” of job-creation programs. “We need more focus on the communities that have suffered disproportionately from this crisis and frankly, from many years before.”
Janis Bowdler, formerly the Senior Housing Policy Analyst and now web director at the National Council of La Raza, said Latino and immigrant communities were a “key voting bloc in the Obama election.” Immigrants and their children will account for 82 percent of household growth between 2005 and 2050, she said.
“We cannot address the rebuilding of the economy without addressing the crisis in the communities of color,” she said. “An estimated 400,000 Hispanic families will lose their homes to foreclosure this year.” Many are victims of “deceptive and unethical lending practices,” she charged. “The ugly side of the picture” she said is that “subprime lenders, predatory lenders” have targeted African American, Latino, and American Indian communities.
“We need to bust the ‘blame the borrower’ myth and look at the structural reasons behind this crisis,” she said.
She urged promotion of non-profit lenders, such as credit unions, that “specialize in serving low income and immigrant families,” and measures that provide real assistance to families who are losing their homes in foreclosure because they are without health insurance and facing huge medical bills.
She also called for “advancing fair lending principles and regulatory reform.” Bowdler too praised President Obama’s economic stimulus package. But much more long-term help is needed, she cautioned. “We know ‘green jobs’ is the buzz right now. Our concern is that our communities are not able to take advantage of that opportunity or may even be pushed out.”
Bowdler pointed out that the financial crisis has been building for many years with African American, Latino, American Indian and other peoples of color targeted by unscrupulous banks and mortgage lenders. “We have not been able to get substantive new laws on the books that will prevent these predatory and discriminatory practices against communities of color,” she said. “The House has passed bills banning predatory lending twice and twice they died in the Senate largely due to the bank lobby,” she said. The Senators lack the “stomach to face up to the lobby.”
The recently passed Credit Card reform bill also faced opposition by these wealthy financiers but it was still passed by the House and Senate “due to a huge groundswell from the regular communities…50,000 wrote in to their representatives, people were so outraged.” She concluded, “To end predatory lending it will take that same kind of groundswell.”