“From 2009 to 2013, if you lived in a majority-black or Hispanic neighborhood and you wanted to apply for a mortgage, Hudson City Savings Bank was not the place to go,” stated U.S. attorney Paul Fishman.
On September 23, the Department of Justice and the Consumer Financial Protection Bureau fined the bank (worth $35 billion) $33 million for redlining practices.
In the wake of the foreclosure crisis, we’ve all heard about how banks regularly target minorities for subprime mortgages, deny sustainable loans to qualified applicants, and neglect foreclosed properties in communities of color. Hudson City Savings Bank, on the other hand, was guilty of ignoring these consumers, rather than exploiting them.
The effect is the same: redlining is alive and well.
Prosecutors contend that communities with mostly minority residents in and around New York and Philadelphia were neglected by the bank. Mortgage brokers, loan officers, and even advertising in these communities were sparse– if they existed at all. This meant that individuals seeking loans or modifications were left to travel long distances– to mostly white neighborhoods– to receive services denied to their own communities.
The Washington Post notes, “In the broader New York City metro, Hudson City used 162 mortgage brokers; just 12 were headquartered in minority census tracts.”
“Redlining is not a vestige of the past. Banks continue to build and structure their lending operations in a way that avoids or fails to really meaningfully serve communities of color,” said Justice Department’s Civil Rights Division’s Vanita Gupta.
Praxia Partners’ initiatives combat the exploitative practice of redlining— a practice that leaves minority communities with fewer services and housing options and opportunities.
Our initiative, the Sustainable Community Investment Fund reverses the effects of the foreclosure crisis and creates lasting neighborhood revitalization. By utilizing real estate and financial expertise, we disrupt the vicious cycle of exploitation and damage by sparking a sustainable cycle of restoration and community-building. Negative effects of the foreclosure crisis aren’t limited to those who lose homes– and when damage is reversed, the benefits are also shared.