Creating Protections to Secure Your Financial Future
Posted on March 01, 2011 by Lillian Bowie, NAACP Director of Economic Partnerships and Development and Nicole Kenney, NAACP Program Specialist for Economic Partnerships and Development
[This is a cross-post from thebrockreport.org]
The housing crisis of the 21st century devastated communities across the United States and the foreclosure rate skyrocketed to alarming numbers. Americans throughout the country either experienced the economic downtown indirectly or directly, but the African American community fared worse than any other racial group and are facing great challenges in regaining economic security even as the economy and labor market begins to recover. Recent data show: 1) The homeownership rate for African Americans has dropped 6% (twice the rate of any other racial group and the national average); 2) The foreclosure rate higher for African Americans than any other group at 8% ; 3) Mortgage lending to African Americans has dropped 60%; and 4) African Americans who are successful at securing a mortgage, often times are still paying more than White and Asian mortgage borrowers.
While no single factor is responsible for the accumulated disadvantages African Americans face, discrimination in lending practices is a leading culprit. In July 2007, the NAACP filed suit in Los Angeles federal court against 15 of the country’s largest mortgage lending institutions. In this first known lawsuit to challenge such lending practices on a broad scale, the NAACP alleges that these lenders violated the Fair Housing Act, the Equal Credit Opportunity Act, and the Civil Rights Act in their practices toward African Americans. The persistence of lending disparities, declining homeownership rates, increasing foreclosures, and challenges accessing prime credit loans all collectively contribute to the growing wealth gap among African Americans; and the NAACP is responding.
Today, the NAACP continues to stand up against financial institutions in the judicial system, challenging them to endorse the NAACP Banking Principles on Fairness and Lending. In April 2010, Wells Fargo became the first financial institution to endorse the NAACP Banking Principles on Fairness and Lending.
In addition, Wells Fargo committed itself to partnering with the NAACP to launch a series of joint initiatives focused on the pursuit of improving fair credit access, sustainable homeownership and financial education for African Americans and others in the community. With the support of Wells Fargo, the NAACP is building the infrastructure to launch the Financial Freedom Campaign Center which will open in Washington DC, during the spring of 2011.
The Financial Freedom Campaign Center will serve as a connector and training facility. The NAACP will partner with national organizations to provide a network of HUD certified counselors to help individuals save their homes, and with premier financial planning and credit counseling organizations to help people get their credit scores back on the right track and to develop financial plans to recover from debt. More so than ever, the NAACP is committed to providing cutting edge information and direction for entrepreneurs and small business owners. Workshop participants will learn the challenges of and opportunities in business development and entrepreneurialism in the aftermath of the greatest economic downturn since the Great Depression. In addition to the multitude of financial education workshops and seminars, the NAACP state conference presidents and unit leadership will receive additional training so they are better prepared to combat these challenges throughout the NAACP units.
The persistence of lending disparities contributes to the structural barriers that limits access to equal opportunity for African Americans, and the racial wealth gap will continue to widen without targeted policies that ensure the absence of discrimination and services to improve economic solvency. The NAACP is responding through direction action and coordinated advocacy, and together we will combat discriminatory lending practices, prevent unnecessary foreclosures, and decrease the disproportionate loss of wealth among African Americans.
The NAACP believes in America and in equal justice and access for all people. Join us in the campaign to promote financial education, equity, and fairness for underserved communities and people of color.