Congresswoman Maxine Waters Supports Final Rule to End Redlining in Los Angeles County and United States

I am pleased that the U.S. Department of Justice took swift and aggressive action and reached a $31 million settlement – marking the largest redlining settlement that the Justice Department has ever secured. Unfortunately, this egregious practice is happening in too many other communities across the country, and now, more than four decades later, the implementation of CRA has not kept up with changes in the banking system.

This is where the featured image description goes.
 

Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released this statement following the Board of Governors of the Federal Reserve System (Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency’s (OCC) final rule to strengthen the Community Reinvestment Act, which requires banks to lend to low- and moderate-income communities where they do  business.  

“I applaud our nation’s banking regulators for issuing their final rule to strengthen the Community Reinvestment Act (CRA). The CRA is a piece of civil rights legislation that was established in 1977 by Congress to respond to racist policies like redlining. Redlining is when a lender denies loans or refuses to extend credit on equal terms based on the characteristics, such as race or ethnicity, of an applicant’s neighborhood. The practice dates back to when Federal government agencies, beginning in the 1930s, drew red lines around Black communities and other communities of color and labeled them as ‘hazardous’ as part of legally sanctioned residential segregation. I have long spoken up against how this shameful practice has greatly impacted Black communities across the country, including right here in Los Angeles County. In fact, just this year, City National Bank was caught red handed by law enforcement to be redlining in majority Black and Latinx neighborhoods in Los Angeles County, including many throughout my district in areas like Hawthorne, Compton, and Watts. In fact, the bank only opened one branch in a majority-Black and Latinx neighborhood and did not assign a single employee to offer mortgage loan applications through the branch like they did in their other branches located in majority-white areas over the past 20 years. This pushed families further away from their dreams of homeownership and locked them out of wealth-building opportunities. 

I am pleased that the U.S. Department of Justice took swift and aggressive action and reached a $31 million settlement – marking the largest redlining settlement that the Justice Department has ever secured. Unfortunately, this egregious practice is happening in too many other communities across the country, and now, more than four decades later, the implementation of CRA has not kept up with changes in the banking system. As a result, not much has changed to turn the tide to ensure homeownership is truly a reality for all. In fact, the homeownership gap is wider now than it was in 1968 when redlining was legal. As it stands today, 75 percent of white Americans own their homes, compared with 46 percent of Black Americans. This is unacceptable and yet another reason why this new CRA rule released today is so critical.  

“For many years, I’ve led the effort in Congress to both strengthen the CRA and guard against extremist Republican attacks seeking to undermine it. From legislation to Committee hearings, and protests, I am very proud we were able to successfully block this harmful and unilateral attempt to gut the CRA and create the space for the banking agencies to work together like they’ve done today on this new rule. 

“With today’s rule, we have a once in a generation opportunity to make meaningful steps toward ending redlining and its present-day manifestation in Los Angeles and across the country. We have much more work to do, but I am pleased with the progress being made by this rule. I will be watching closely to see how our nation’s banking regulators implement it and will craft any legislation that may be necessary to bolster this effort so we can end redlining once and for all.” 

“California Educators are the heart of our community. And why the California Teachers Association knows quality public schools make a better California for all of us.”