'Redlining by race' practice in the banking
What do you know about financial discrimination? It will interest you to know the ‘damage’ this kind of discrimination can cause.
In the 50s Blacks faced great challenges in acquiring mortgages because of redlining by race. A latter government intervention resolved the issue. And as of now, every Black man has the opportunity to acquire a mortgage. Despite such a move by the government to resolve the issue, some banks and insurance companies still uphold the “redlining by race” ideology. The overwhelming redlining complaints led to the last financial crisis we experienced. For example, the verdict given in the case of Associated Bank in Wisconsin was distinctively discrimination against Black and Hispanic borrowers
I discussed this issue with Andrew Solomon the representative of McArthur Foundation which operates in Chicago and has branches around the world. Also, we got the comment of Julia Stasch, the President of the ‘John D. and Catherine T. MacArthur Foundation’. As a summary, they sponsored organizations that fight with redlining in the financial system like ‘Neighborhood Housing Services’ or ‘Community Investment Corporation’.
Julia Stasch wrote in her letter: “With respect to the notion of “redlining,” you should be aware that some of the organizations that have significant resources from MacArthur were actually created to combat historic redlining by banks in Chicago. These include Neighborhood Housing Services, which provides residential mortgages primarily for families in African-American and Latino neighborhoods, and Community Investment Corporation, which provides acquisition and rehabilitation funding for small-scale, private owners of affordable housing in local neighborhoods.”
“With respect to Benefit Chicago—our $100 million impact-investing collaboration with the Chicago Community Trust and Calvert Foundation—it is our belief that economic revitalization, new, family-sustaining jobs, and improved communities require more than foundation grants or government funding; it requires significant new investments over the long term. That’s why MacArthur makes impact investments in addition to our grants. Grants and impact investments (low-interest loans, for example) serve two different purposes for nonprofit organizations. Most nonprofits that need to build or renovate a large facility or purchase expensive equipment cannot cover the costs of these projects with grants alone. Low-cost financing also allows a nonprofit to pay for the cost of these assets over a longer time horizon, matching their financial outlays to the assets’ useful life.”
Redlining in financing Black communities is a case of discrimination. Some banks go as far as blocking donated funds meant for Black communities. According to bankers, there are set-rules which restrict financial institutions from granting financial aid to any organization with ethnic or racial background. Thus, financial redlining greatly works against people of color. The Black community has given “new life” to Detroit and Chicago creating a surviving atmosphere for the citizens. The unanticipated good news of redlining was that it resulted in the springing up of many Black banks. Though these banks aren’t as big as the known ‘white’ banks, they are the best places to acquire mortgages or any other form of financial aid for Black people.
If by any means you have been financially redlined because you are Black, contact us. We will gladly help you out.
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