National Civil Rights Groups Say, As Released, Johnson-Crapo Does Not Provide Credit Access for Communities of Color


Center for Responsible Lending
March 21, 2014

Joint statement

The Leadership Conference on Civil and Human Rights, National Association for the Advancement of Colored People, National Coalition for Asian Pacific American Community Development, National Council of La Raza, National Fair Housing Alliance, National Urban League, and Center for Responsible Lending express serious concerns, say much needs to be fixed

The new Senate proposal to reform the housing finance system would needlessly make mortgages more expensive and less available, announced civil rights groups today. The goal of housing finance reform is to create a safe housing finance system that provides affordable mortgages to all creditworthy borrowers, including people of color and families with modest incomes and lower wealth. We have serious concerns that the legislation proposed this week does not achieve that goal, the groups said, and we look forward to working with the co-sponsors to improve the bill.

Historically, the mortgage market has not adequately provided equal credit access to communities of color and low-income families. More recently, subprime lenders targeted these same communities for predatory mortgage loans; the impact of the foreclosure crisis fell disproportionately on communities of color, stripping the vast majority of family wealth built up over the last decade. Today’s mortgage market is worse, excluding families of color almost entirely. According to the most recent Home Mortgage Disclosure Act data, there were 1.3 million conventional mortgage loans made in 2012; of those, Latinos received only 69,217 loans, African-Americans received 29,405 loans, and Asian American Pacific Islanders received 2,697 loans. There were 4.9 million refinance loans made in 2012, of which Latinos received 76,038, African-Americans received 75,785, and Asian American Pacific Islanders received 10,611. The Johnson-Crapo proposal does not sufficiently address this ongoing inequity – it does not provide a forward and inclusive way for communities to participate in the future housing market even though they will soon comprise the majority of new households in the United States by 2020.

Chief among the concerns expressed by the groups was the need for broad access and affordability of the housing finance system. Provisions in the proposed legislation, including those pertaining to down payment requirements and the responsibility to serve the entire market, may prevent families who could afford a mortgage from obtaining one. The bill lacks provisions to ensure that the housing finance system is fair and non-discriminatory. Moreover, the changes proposed in the reform bill may disadvantage smaller and rural lenders that serve already under-serviced portions of the population.

As drafted, this proposal makes it extremely difficult for communities of color to participate in the housing market today and in the future, according to the groups. While expressing appreciation for the Senate’s bipartisan efforts, the groups underlined their concern that the legislation would widen the existing wealth gap and lock out the very borrowers the market needs to operate in a healthy manner. Much more needs to be done, the groups agreed.

The Housing Finance Reform and Taxpayer Protection Act of 2014 was released on Sunday, March 16 by Senate Banking Committee Chairman Tim Johnson and Ranking Member Senator Mike Crapo.

  • Wade Henderson, The Leadership Conference on Civil and Human Rights
  • Hilary Shelton, National Association for the Advancement of Colored People
  • Lisa Hasegawa, National Coalition for Asian Pacific American Community Development
  • Janet Murguia, National Council of La Raza
  • Shanna Smith, National Fair Housing Alliance
  • Marc Morial, National Urban League
  • Michael Calhoun, Center for Responsible Lending

For more information, contact Catherine An in DC at 202-349-2878 or catherine.an@responsiblelending.org.

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About the Center for Responsible Lending

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.