Progress in the Fight Against Redlining: Major Strides in Ensuring Fair Access to Credit
In a landmark series of actions, the U.S. Justice Department has made considerable progress in addressing the long-standing issue of redlining, a discriminatory practice where lenders avoid serving neighborhoods based on the racial or ethnic makeup of the community. This practice, which denies people of color equal access to lending opportunities, is not only morally wrong but also illegal.
Since the launch of the Combating Redlining Initiative in October 2021, the Justice Department, under the leadership of U.S. Attorney General Merrick B. Garland and Assistant Attorney General Kristen Clarke, has been diligently working to enforce federal civil rights laws that challenge redlining. The initiative is the Department's boldest and most coordinated effort to date, tackling redlining on a broader geographic scale than ever before. With significant progress in holding lenders accountable when they deny people of color equal access to lending opportunities.
The Successes of the Initiative are Noteworthy
Since 2021, more than $100 million has been secured from lenders, providing significant relief to residents of communities of color affected by redlining. The Department has resolved redlining cases across several major cities, including Houston, Memphis, Philadelphia, and Los Angeles.
In a striking achievement, the Department settled the most significant redlining case in its history with City National Bank, which included over $31 million in relief to impacted communities. This settlement, along with others, has required lenders to establish loan subsidy funds, invest in community partnerships, conduct targeted advertising and outreach, and launch educational initiatives to benefit communities of color.
The progress made by the initiative is a beacon of hope and a testament to the power of determined, coordinated action in the face of deep-rooted societal challenges. Ensuring fair access to loans and closing the wealth gaps between communities with a clear goal of eradicating redlining and achieving equality in lending and housing opportunities for all Americans.
Over the past 24 months, the initiative has reached a total of 10 settlements with lending institutions to resolve allegations of redlining.
Citations:
https://www.brookings.edu/articles/an-analysis-of-financial-institutions-in-black-majority-communities-black-borrowers-and-depositors-face-considerable-challenges-in-accessing-banking-services/
https://www.investopedia.com/the-history-of-lending-discrimination-5076948
