Enforcing Anti-Discrimination Lending Laws
March 5th, 2009
The city comptroller yesterday filed an amicus brief with the U.S. Supreme Court in support of Attorney General Andrew Cuomo’s attempts to enforce national banks’ compliance with state laws against discriminatory lending. The brief used data from the comptroller’s office showing the need for such enforcement in New York City.
“In New York City, African-American and Hispanic home buyers and owners, at all income levels, have been the victims of disparate and unequal treatment by home mortgage lenders, including national banks and their affiliates,Ē Comptroller William Thompson said in the brief.
Using data from his office’s Foreclosure Prevention Helpline, the comptroller’s office found that homeowners in danger of facing foreclosure are concentrated in black and Hispanic neighborhoods, regardless of the areas’ income levels.
“This starkly disparate outcome appears to result from the exact issue [Cuomo] had attempted to investigate before being enjoined: that ‘a significantly higher percentage of high-interest home mortgage loans are issued to African-American and Hispanic borrowers than to white borrowers.’”
The data adds to numerous other studies that come to similar conclusions from the Furman Center, the Neighborhood Economic Development Advocacy Project and the New York Times.
In January the Supreme Court agreed, at the urging of Attorney General Andrew Cuomo, to hear arguments over the enforcement. The other 49 states also filed a brief urging the court to take the case. Oral arguments are scheduled for the end of April. The Obama Administration is expected to announce its position on the issue at the end of March.
The case is the result of a 2005 investigation by then Attorney General Eliot Spitzer into possible racial discrimination by several banks’ real estate lending practices. That investigation was squashed when the federal Office of the Comptroller of the Currency and the Clearinghouse Association (an alliance of national banks) successfully sued to have it halted by the courts.
The NAACP Legal Defense Fund, the Lawyers’ Committee for Civil Rights Under Law and the National Fair Housing Alliance also filed a brief in support of Cuomo yesterday. “Congress never intended a federal agency, especially one with such limited oversight capacity as the [Office of the Comptroller of the Currency], to prevent states from enforcing their own fair lending and anti-discrimination laws,” they argued in a statement.
“This case presents the Supreme Court with an ideal opportunity to address the root of our current economic crisis. This will place, at the forefront, the impact this crisis has and continues to have on minority communities,” said John Payton, president of the legal fund.By Mike Muller on March 5, 2009, 8:03 pm
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