Transcript CFPB FinEx Webinar: Unpacking the Black Wealth Gap February 22, 2022 Presenters: Desmond Brown, Assistant Director, CFPB Office of Consumer Education; Dr. Charles Nier, Senior Council, CFPB Supervision Policy; Varda Hussain, Special Litigation Counsel for Fair Lending, U.S. Department of Justice Facilitator: Heather Brown, Ed.D., CFPB Office of Consumer Education, CFPB FinEx Program Lead >>Ms. Tracey Wade: Good afternoon. I am Tracey Wade from the Bureau's Events Management Team. I will go over some logistics before we begin. If you are having any issues with your audio, click on the Audio button located in the Participant Panel. There, you will receive guidance on switching your audio to your telephone. A link to live closed captioning can be found in the Chat Box, which is in the lower left side of the Webex window. If you have a question or comment, please type it into the Chat Box. To adjust the way that you are viewing the Webex, click on the layout button near the bottom of the screen—I'm sorry—near the top of the screen. There, you can toggle between the different Webex views. For technical support during this event, send a message in the Chat Box to the host, and I will provide assistance. Now I will turn the event over to Heather Brown of the Bureau's Office of Consumer Education. >>Dr. Heather Brown: Good afternoon, everyone, and welcome to the webinar for this year on the Black wealth gap. This is sort of a part two, a follow-up to the previous webinar we did last February on the same topic, but there will be some review. For those that weren't here, don't feel like you have to have watched that in order to benefit from the actual webinar. We will provide you a link where you can actually go and see that webinar if you'd like. I'd also like to let everyone know that we will send out a copy of the slides to everyone that provided their email when they logged into the event. If you did not provide your email and you would like a copy of the presentation, please send an email to CFPB_FinEx@cfpb.gov, and we will be providing that throughout the webinar in the Chat Box. So don't worry if you didn't catch it that time. You'll be able to get it again. I'd really like to thank Imani Harvey and the RISE Black Employees Resource Group who originally conceived the idea for this webinar, and I thought it would be great—we did it internally, and I thought it would be great to bring to the FinEx audience. For those of you that are new to FinEx, my name is Heather Brown. I'm the CFPB FinEx Program Lead, and I'll be your moderator for today's webinar. The CFPB FinEx Program has over 40,000 subscribers, and you are welcome to join as well, and I will tell you how to do that. I'm going to go through a couple of preliminary slides, and I'm going to introduce our speakers, and we'll get started. First, I'd like to go through a disclaimer. This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the Bureau. It does not constitute legal interpretation, guidance, or advice of the Consumer Financial Protection Bureau. Any opinions or views stated by the presenters are the presenters' own and may not represent the Bureau's views. This presentation includes references to third-party resources. The Bureau does not guarantee the accuracy of this third-party information. We may not have vetted the third party, and we do not endorse the third party. Other entities and resources may also meet your needs. And for those that pass this off to others, we just have a little statement to help them understand that they might not get the full impact of what they're reading just from the slides if they didn't see the presentation. I'd also like to make sure you know the mission of the CFPB. The CFPB is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. I just want to point you quickly to our coronavirus pandemic page. You will get a copy of the slides if you registered. You can take a picture of this if you like, but we just want to make sure people know where, that this is up, and still being updated regularly. We have information on housing, renting. We link to CDC and the White House and Health and Human Services. So it's a great resource that you can refer your colleagues, your clients, and anyone to that, that has a question regarding their finances in the pandemic. This is a snapshot of the landing page for our practitioners page. On the right, you see the email address box where you can actually go to this page into your email and join our subscriber list. If you did not get an email for this webinar directly, then you may want to add your name and joint it so that you'll get notification on research tools and well as webinars that come up. This is actually the landing page that shows past webinars, and I'll provide you the link to this as well so you have it. And I also would like for you to be able to visit the page to see last year's Black Wealth Gap event as well, if that's something that you're interested in doing. We're going to also have all of these links at the end of it when we're asking questions. So you'll have many more chances to grab this information. And here are some of the links I've already talked about, but the second bullet is also the link to our publications, and you can order free copies of all of our publications, literally hundreds of publications on credit, budgeting, getting an auto loan, pretty much anything that you can imagine that you need, by going to that link to our publishing house and searching for the topic you're interested in, ordering it. The publications are free, and the shipping is free. And for practitioners, you can get them in bulk if you're running classroom events or if you just want to have some stock to use one on one with your clients when you're coaching. We're going to move to the topic of the day now, but I want to do a quick introduction of all of our speakers. I'm going to introduce our speakers in the order that they're going to present, and our first speaker will be Mr. Desmond Brown, and Desmond Brown serves as the Assistant Director for the Office of Consumer Education at the CFPB. In this position, he leads the Bureau's consumer education and financial inclusion work to improve access to safe and affordable financial services for all consumers. Prior to CFPB, he served as a senior director for Government Affairs at the Catholic Charities USA where he worked to advance policies and programs to support low-income families. He holds degrees from Southern Connecticut State University and Georgetown University, and I appreciate all the support he's given for all the FinEx programs, including this Black Wealth Gap event this year and last year. The next speaker that we'll have after Desmond will be Dr. Charles Nier. Dr. Nier is senior counsel with the Consumer Financial Protection Bureau and works on fair lending matters. Prior to his employment with the CFPB, Dr. Nier served as supervising attorney with the Pennsylvania Human Relations Commission enforcing Pennsylvania Civil Rights laws. Dr. Nier published a number of legal and historical Civil Rights articles and graduated from Ohio University with a BA from Dickenson Law School of the Penn State University with a JD and from Georgetown University Law Center with an LLM and from Temple University with a Ph.D. in history. And a lot of the research he shares is also from his personal writings and research, and he presented last year. So we welcome him back as well, and we're so glad to have him. And then we have a special invited guest today Varda Hussain. Ms. Varda Hussain is a special litigation counsel for Fair Lending in the Civil Rights Division of the Department of Justice. In this role, Ms. Hussain helps to oversee the division's fair lending enforcement work. Prior to this position, Ms. Hussain served as the managing counsel for Fair Lending Enforcement at the Federal Reserve. In this role, Ms. Hussain managed an interdisciplinary team of attorneys, economists, and analysts that provided subject matter and legal expertise on fair lending matters arising from supervisory activities, and today she's going to speak with us about the new Redlining Initiative coming from the Department of Justice. So we look forward to all of our speakers. We welcome you and thank you for providing your background and information and sharing your knowledge with us, and now we're going to have Desmond Brown from our Office of Financial Education and from our Division of Consumer Education speak. >>Mr. Desmond Brown: Thank you, Heather. Good afternoon, everyone. On behalf of CFPB, I want to thank you so much for joining us for this important discussion today. This conversation and others in the future is really helping us to better understand ways the CFPB can work to increase opportunities and improve the financial well-being of people in your communities. As a financial education practitioner or a coach or just someone who's working with others, it's really important to understand the challenges and historic barriers faced by people you serve and how those barriers impact their financial decisions, their financial well-being, and the types of transfer of wealth that occurs. We hope that this session will provide you with new insights to help you understand the unique challenges faced by diverse communities and how you can potentially tailor your services to help people from different backgrounds that you serve in your practice. Certainly, in recent years, there has been a renewed national focus on racial and economic equity in the country, and for many of us, this is a welcome and much overdue national dialogue. The CFPB has been focused on racial equity and inclusion in the financial services marketplace since we started in the wake of the 2008 housing crisis which took billions of dollars in wealth from African American and Hispanic families. Congress wanted to create a new government agency that would make sure that banks, lenders, and other financial institutions treated consumers fairly, and that's one of the reasons why the CFPB has always focused on these important issues around making sure that not only financial services are fair, that they're equitably provided to consumers form all different backgrounds in all communities across the country. Now that the COVID-19 pandemic has brought a new set of economic crisis to consumers, further exposing many of the long-lasting racial inequities that have plagued this country for many years, we know that COVID-19 has not impacted all communities in the same way, both in terms of the health impacts but also the economic impacts. For example, 31 percent of Black Americans and 26 percent of Hispanics have reported being unable to pay for the most basic necessities such as food and utilities. This is compared to about 10 percent among White Americans. Hispanics were three times as likely and Blacks more than twice as likely to use up all of their savings as compared to those within the White community. We also know that Black and Brown communities have faced unique and historic challenges dealing with housing insecurity as a result of COVID-19. So, in all of these areas, work at the CFPB is firmly committed to protecting communities, and we are equally committed to empowering people who live in diverse communities across the country and providing them with opportunities to build the skills and knowledge and confidence to manage their finances effectively so that they can weather so many of the different economic challenges that they face. This is why it is so important for us to really partner with consumer organizations around the country at this moment so that we can provide resources, gather intelligence, and identify some of the long-lasting effects of discriminatory practices so that we can incorporate those learnings into our work as we go forward because we strongly feel that these long-term impacts and long-term challenges that communities have faced contribute dramatically to the wealth gap that we see today, and if we going to reduce the gap, we need to understand the challenges but also make changes to curtail some of the bad practices that are currently happening. In many segments of the financial marketplace, there continues to be considerable evidence that Black and Hispanics are disproportionately impacted. The status show this. For example, the short-term impacts that I can share today, we see that 17 percent of Black households and 14 percent of Hispanic households are unbanked. This is compared to about 3 percent among White households, and you might say how does banking impact generational wealth. Well, if the family doesn't have a relationship with a financial institution, it may impact their ability to borrow, it may impact their ability to save, and it may impact relationships that they have with a ppr financial institution if they're trying to get a long to purchase a car or other types of resources that they might need to move up in the economy. So today's presentation is a critical discussion, both looking back and looking at today and thinking about ways that we should move forward in the future. This presentation will not only provide a historic perspective, but we hope from a dialogue with participants, we'll identify some new areas that we should continue to explore and identify areas that the Bureau might want to look into to help address some of these challenges. And as we come towards the end of Black History Month, we feel that it's critical that these types of conversations continue beyond February and to continue into the rest of the year because it is through collaboration and partnership and understanding the challenges that different communities face that we'll be able to really make significant efforts in tackling these challenges that so many of our colleagues, friends, families, and neighbors face every day. So, with that, I want to again thank you so much for joining us today, and I want to turn the conversation over to my colleague, Dr. Nier, who will provide a much more details and robust historic perspective on these important issues. I turn it over to you, Charles. >>Dr. Charles Nier: Very good. Thank you, Desmond. So, for today's discussion, what I'd like to focus on is the historical origins of redlining and the devaluation of Black communities and what role that has in perpetuating the Black wealth gap. So let's start with a discussion about what wealth is in the United States. So wealth is the total extent of an individual's accumulated assets less any debt, and wealth has enormous impact on a wide variety of life opportunities. It impacts virtually every aspect of our lives in the United States, from education, housing, employment, social capital, and intergenerational transfers of wealth to the next generation, and in some ways, wealth is the single best indicator of racial inequality in the United States, given its comprehensive nature in broad and long-lasing impact on communities. And the Federal Reserve released updated racial wealth data from the 2019 Survey of Consumer Finance, and it found, not surprisingly, a very large racial wealth gap. African-American households had a median net worth of $24,000 and a mean net worth of $142,500 in comparison to White households which had a median network of $188,000 and a mean net worth of almost a million dollars. So that's roughly about an eight-fold gap between African American households and White households. This racial wealth gap is not new. It's been quite durable for decades, and it continues in present day in very large magnitudes. So, in understanding what that racial wealth gap means, the first place to look at really is homeownership. It's the single most important means of accumulating wealth for most families in the United States, and the most recent data as of fourth quarter 2021 indicated that the homeownership gap between African Americans and Whites stood at 31.3 percent, which is actually historically very high. And it's also consistent with the last 100 or so years where that racial homeownership gap has consistently exceeded 25 percent. So it's a large gap, it's durable, and it's lasted for decades. In fact, a recent study concluded that if you were to eliminate the disparities in homeownership rates and eliminate sort of and ensure equality of returns on investment, it would substantially reduce the racial wealth gap. So, in other words, if the 31.3 percent gap was eliminated, this study found that the wealth gap would shrink by 31 percent, and if you also equalized gains in home equity, that would contribute to a further reduction in the gap of 16 percent. So what we find here from this study is almost 50 percent of the racial wealth gap is in some way attributable to homeownership. It is a huge drive in the racial wealth gap in the United States. So one explanation for the racial wealth gap is then the racial homeownership gap, which then sort of turns us to credit. Since few people have the financial resources to purchase a home without restoring to financing, a key component to achieving homeownership is access to fair and equitable credit. However, African Americans have historically faced widespread discrimination in the credit markets. And last year, as Heather mentioned, we took a long view of that discrimination, and in today's session, one of the main areas we're going to focus on is redlining, which is defined as mortgage credit discrimination based on the racial or ethnic characteristics of the neighborhood surrounding the would-be borrower's dwelling. So, in looking at redlining from a historical perspective and understanding racial wealth equality, it's really important to analyze it from a three-dimensional vantage point. So it's important to look at the external factors; in other words, those factors like discrimination and segregation and what impact they are having on the African American community. It's also important to look at structural factors; for example, Federal, State, and local government action or actions of the private markets and what impact those have on the African American community. And, finally, it's important to look internally at the African American community itself and focus on such things as Civil Rights activism and economic development. So such a three-dimensional analysis will essentially allow us to create a more wholesome and holistic understanding of redlining, both from a historical perspective and its impact on wealth accumulation in the United States. So let's start with really perhaps one of the most significant external factors, and that's the nexus between rate and property value in the United States. Since the founding of the United States, a negative correlation between race and property value has existed as a core pillar of racial discrimination in the country, and I've listed a few examples to sort of illustrate what that point means. So, in 1793—and just to put that time in historical reference, George Washington was just being sworn in for his second term in office. A White minister protested an attempt to locate a "Negro hut" in Salem, Massachusetts, noting that it would depreciate property, drive out decent residents, and injure the welfare of the neighborhood. Similarly, in 1850, just a decade or so before the Civil War, a White resident in Indiana complained that establishing a "Negro tract of real estate" would reduce the value of White-owned lots by at least 50 percent. And, finally, in 1899, we hear from W.E.B. DuBois, a Civil Rights leader, who did an exhaustive study on Philadelphia, and he explained that "public opinion in the city is such that the presence of even a respectable colored family in a block will affect its value for renting or sale." So these are just a few examples of a discriminatory belief that African Americans and African American neighborhoods have a negative impact upon White property values. So it's sort of the key external factor here that we're going to discuss in sort of some of the next slides. But, internally, let's turn to internally. What's going on within the African American community at this time period? So intent on escaping the violence and discrimination of the South, between 1910 and 1970, millions of African Americans left the rural South for the urban cities in the North, Midwest, and West seeking both economic and educational opportunities, and it really happened in two waves. The first wave was the Great Migration from 1910 to 1940, where we see about 1.6 million African Americans arrive primarily in the cities of the Northwest, and there's an example here. In New York, you just see the incredible population explosion in just 30 years, from 140,000 to over 650,000. The second Great Migration, from 1940 to 1970, even larger numbers arrive in the northern cities, 3.5 million in the Northeast, the Midwest, and the West. For example, you can see the population trends in Los Angeles and San Francisco grow 10 times in just 30 years, from 76,000 to 765,000, and likewise, similar explosive growth in San Francisco. This was the largest internal movement of any group in American history. And here you see sort of a map of the trends of the first Great Migration, where it's an exodus from the South to many of the cities in the North: Chicago, Detroit, Philadelphia, New York. Huge population shifts. And then the second Great Migration, that will expand to the West and Midwest as well. As African Americans are arriving in the North, they brought with them the cultural baggage of wanting to achieve homeownership, and in the early 20th century, the structure of the mortgage finance system was very challenging. Mortgages typically required a large down payment, usually half of the purchase price, with the remainder financed with a straight mortgage, usually about 2 to 6 percent interest rate with fees ranging from 3 to 6 percent of the loan. These were 5-year-term loans, interest only, with a balloon payment at the end. Given the fact that about half of it had to be put down for down payment, borrowers often took out second mortgages to cover that, and those came at higher interest rates, 4 to 12 percent, and higher fees, as much as 20 percent of the loan. Again, these were short-term loans, 1 to 3 years, with additional fees upon renewal, and on occasion, borrowers even used small third mortgages to cover the fees as well as make the first payments on the two mortgages. So it was a challenging system of finance in order to acquire and enter the ranks of homeownership. So African Americans faced additional external factors and barriers in an already challenging financial structural system. So, first, the bank simply refused to lend to African Americans, and even if a bank did make a mortgage loan to African Americans, the terms and conditions were often onerous in comparison to Whites. Typically, African American borrowers were charged interest rates and fees at least double those offered to Whites. And I have a quote on this page from Raymond Pace Alexander, who was a very prominent African American lawyer in Philadelphia, explaining the dynamic saying, "If a colored man owned city hall, he would be unable to get a first mortgage on it at this bank. They absolutely refuse to lend money in any manner to Negroes." So, of course, this all begins to change here when the Federal Government gets involved with homeownership because remember prior to the 1930s, the United States had traditionally considered the entire housing process from construction to purchase to be basically an individual decision, and the Federal Government favored a hands-off policy regarding housing. However, that all changed with the beginning of the Great Depression. We see staggering financial losses, 5,000 banks closed, $7 billion in depositor funds vanished, housing construction virtually stops, and by 1933, one-half of all mortgages in the country were in default with foreclosures running over a thousand per day. So, in response to this crisis, the Federal Government revolutionized housing finance to rescue the market and to make homeownership more accessible to Americans. Unfortunately, the system the government introduced to support homeownership placed significant discriminatory and structural barriers in the path of African Americans. And it really starts with the Home Owners' Loan Corporation, which was established in 1933 to assist families in danger of foreclosure by refinancing existing delinquent mortgages. Between 1933 and 1935, it supplied over $3 billion for over 1 million mortgages. In fact, 40 percent of all qualified mortgagees sought its assistance, and the reason folks sought the assistance of the HOLC was because it revolutionized the finance business by for the first time introducing widespread usage of a 15-term fully amortized mortgage at an interest rate of 5 percent. Since the HOLC was dealing with mortgages in default and potential foreclosure, it also introduced standardized appraisals of properties and communities in order to assess possible risk. While the appraisal was standard in the real estate industry at the time, as historian Kenneth Jackson noted, what the HOLC did that was different was it created a formal and uniform system of appraisal, reduced to writing, structured in defined procedures, and implemented by individuals only after intensive training. So it essentially provided structure to the appraisal process, and it provided structure to the mortgage industry itself. The development of the standardized appraisal practices were influenced, heavily influenced by urban and neighborhood development theory, established by just a small group of academics and real estate professionals and led by Frederick Babcock, who was a Chicago real estate appraiser, and he developed an ecological theory of gradual but inevitable neighborhood decline accompanied by successive waves of residents, resulting in occupation by "the poorest, most incompetent, least desirable groups in the city." It was a very sort of Darwinist way to look at neighborhoods and what happens to them over time, but for our purposes and for today's discussion, what he said about race is really the significant factor in contributing to sort of the intellectual underpinnings of redlining. In his manual The Valuation of Real Estate, Babcock explained, "Among the traits and characteristics of people which influence land values, racial heritage and tendencies seem to be of paramount importance," and he argued that "most of the variations and differences between people are flight, and value declines are, as a result, gradual. However, there is one difference in people, namely race, which can result in very rapid decline. Usually, such declines can be partially avoided by segregation, and this device has been in common usage in the South where White and Negro populations have been separated." So Babcock is making explicit, the connection between race and property values, and it becomes part of the standardized appraisal process and the way we look at valuation in race. It was followed up also by the work of Homer Hoyt, and he developed a filtering or trickle-down model, which suggested that as properties and neighborhoods got older, they filtered down to poor and less capable persons until they were transformed into slums. And he also interjected race into the equation. He explained that "Part of the attitude reflected in lower land values is due entirely to racial prejudice, which may have no reasonable basis. Nevertheless, if the entrance of a colored family into a White neighborhood causes a general exodus of White people, such dislikes are reflected in property values." Again, just like Babcock, he is injecting race into valuation and does so in a very direct manner. He understands and is articulating that racial prejudice, irrespective of whether it's reasonable or not, drives down property values. And his work goes on to list racial and ethnic groups in order of most desirable to those which have the most adverse impact on property values, listing Negroes and Mexicans at the bottom of the list. He explained that "while the ranking may be scientifically wrong from a standpoint of inherent racial characteristics, it registers an opinion or prejudice that is reflected in the land values." So he's essentially again making the connection explicit that race negatively impacts land values. So, with that intellectual underpinning, the HOLC commenced a City Survey Program to look at real estate risk in 239 cities in the United States, and it did this by distributing questionnaires across the country to local real state professionals and mortgage lenders to measure risk. And in the process of rating neighborhoods, these risk assessments incorporated existing "notions of ethic and racial worth." In fact, no characteristic was more important than race for appraisal purposes. So what you see here is the external factor of discrimination becomes embedded into the structural appraisal process and risk assessment process in the United States in the HOLC City Survey Program. This is an example of one of the forms that were distributed. Thousands of these were filled out across the country to assess risk, and I know this is a little bit hard to read. But the first arrow, one of the questions specifically asks about detrimental influences, and in this particular form, it indicated there was a mixture of Negro and poor Whites in the area. This was Dayton, Ohio. There's an explicit question about infiltration. This form referenced Negroes in response to that question, and then there was another question that explicit said Negro and wanted a yes or no answer. If the answer was yes, it wanted a percentage breakdown. In this case, it was yes in approximately 80 percent, and based on that, this neighborhood was classified as low red, which means very high risk. And it's very high risk because of the indicators flagged in terms of African American population in this area. So what they then did was they took all of this information from all these forms and developed four color-coded categories of risk, sort of a very basic risk scheme and assessment. At the top, you had A, which was coded green. These were the best areas, in demand in good times and bad. Next was B, which was coded blue and called "still desirable." Next, you had C coded yellow, which were defined as definitely declining, and finally D, which were coded red. They were designated as hazardous areas in "which the things taking place in C areas have already happened, characterized by detrimental influences of a pronounced degree, undesirable populations or an infiltration of it." And African American neighborhoods, given that relationship between race and property value, were almost always rated fourth by the HOLC and redlined. That's where the term comes from. The Category D was marked red and redlined. For example, in Detroit, every neighborhood with any degree of African American population was rated D, deemed hazardous by Federal appraisers, and following the completion of this rating system, the HOLC prepared color-coded residential security maps which detailed the various real estate risk grades across broad geographic areas. Probably folks are familiar with these maps. They've received a fair amount of publicity lately, and they have all been digitized, and they're available through the University of Richmond, has a wonderful tool that allows you to explore these maps if folks are interested in doing some additional research. This is an example of the Atlanta map. The Los Angeles map. So what impact did all of this have on the HOLC's lending? The HOLC actually had a mixed record of mortgage lending in neighborhoods coded yellow and D. The HOLC was very much a locally administered program, like a lot of the New Deal programs. So, in some areas, they did actually do some significant lending, but nevertheless, African Americans were subject to discriminatory practices. First of all, if a neighborhood was rated D, it was charged a higher interest rate. It also reinforced segregation by refusing to sell and make loans to African Americans for properties in White areas, and finally, it also under-appraised the value of African American areas. But really the major damage that it did was by adopting, elaborating, and implicitly placing the Federal Government's deal of approval upon notions of real estate value and race. So, in other words, it took the external factor of discrimination and basically structuralized it, institutionalized it, and that is then, in turn, adopted by the private financial institutions in markets and leading to widespread racial redlining. But, really, the bigger impact is going to come later with the Federal Housing Administration. The FHA was established to facilitate sound home financing on reasonable terms. It didn't directly lend money to borrowers. Rather, it insured against losses, and it was tremendously successful. By the end of 1972, the FHA had assisted 11 million families in achieving homeownership, but again, this success came at a price, as it largely provided FHA financing in White areas, in the suburbs, to the detriment of African Americans who were residing in segregated areas in the North and across the country. So how did it do that? Well, both Homer Hoyt and Frederick Babcock, who I spoke about earlier, they both worked at the FHA, and in fact, in leadership roles, they played a huge role in developing the FHA appraisal and underwriting practices. The FHA, like the HOLC and consistent with sort of the thoughts of Hoyt and Babcock, required an unbiased professional estimate as a prerequisite to any loan guarantee in order to ensure the value of the property would exceed any outstanding mortgage debt. Acting on the HOLC's rating system, the FHA developed even more explicit and elaborate advice on race and real state value in tis appraiser manual. So, again, we see the further structural nature of how the external factor of discrimination becomes institutionalized. So this is an excerpt from the actual Underwriting Manual, which explicitly draws the connection between race and valuation. For example, "If a neighborhood is to retain stability, it's necessary that properties shall continue to be occupied by the same social and racial classes. A change in social or racial occupancy generally leads to instability and a reduction in values." So there it is sort of explicitly in the Underwriting Manual. It warned against the "dangers of infiltration of inharmonious facial groups and nationality groups" and argued to prevent such infiltration, it recommended "subdivision regulations and suitable restrictive covenants as an excellent method to maintain neighborhood stability." In fact, basically, the entire FHA appraisal process was based no the premise that racial segregation was necessary to ensure property values because of the discriminatory concept that African Americans or African American neighborhoods have a negative impact on valuation. So, if that's your belief and that's the case, the way to remediate that or address that is through rigid segregation. Of course, the FHA had a broad impact on private financial institutions, which institutionalized a lot of these structural appraisal processes. For instance, in 1951, the McMichael's Appraising Manual, which is considered sort of the bible of appraising, included Hoyt's ranking of racial or ethnic groups, and we see in Chicago, a survey of 241 savings and loan institutions found that 19 were willing to make loans to African Americans, provided they were purchasing in African American neighborhoods, and only one was willing to grant a mortgage to African Americans moving to a White neighborhood. I've got a quote here on this page from I. Maximillian Martin who is an African American real estate expert in Philadelphia explaining the dynamic: "Today, however, a very decided bias exists on the part of mortgage lending agencies. Upon learning the racial identity of an applicant or on finding that the property is occupied by colored people, the loan is often immediately rejected without further investigation." And I wanted to give you sort of a few examples of what this actually looked like. So, in Detroit, a developer proposed an all-White subdivision next to a Black neighborhood in the Eight Mile-Wyoming area of the city, which was an area that the HOLC appraisers had previously deemed as hazardous, D, and redlined. The FHA denied the developer financing, not because he was going to sell to African Americans but rather just because it was in close proximity to a hazardous Black neighborhood. As a compromise, the FHA finally agreed to provide mortgage loan guarantees for the development as long as the developer built a foot-thick, 6-foot-high wall that stretched for a half a mile to separate Black and White neighborhoods. And you can see that in the background of the image on this slide. Likewise, the Dixons in 1936, they had purchased an empty lot in Cleveland Heights, Ohio. They began to strategize on how they could secure mortgage funding to build a home, and they received a letter from the Second Federal Savings and Loan Company containing information about FHA financing in a way to gain their business. After receiving the letter, the Dixons went to the bank, but during the meeting with the bank's mortgage specialist, he openly admitted, "There is no need in me kidding you, Mr. Dixon, and taking your money for appraisal fees." The bank's loan committee would reject his mortgage loan application. The mortgage agent later revealed, "Confidentially, it is the policy of the bank not to loan money to Negroes under any circumstances." So this all sort of begs the question. Was this actually true? Did African Americans drive down property values, White property values? There are some studies that have been done on this point. So, in 1948, an FHA official published a report asserting that "the infiltration of Negro owner occupants has tended to appreciate property values and neighborhood stability." Likewise, an 1952 article reviewing real state sales in San Francisco that was published in the Appraisal Journal concluded that its analysis did "not show any deterioration in market prices that occurred following changes in racial patterns." In 1960, probably the most comprehensive analysis in property values and race, it looked at sales prices of properties in Philadelphia, Oakland, and San Francisco and concluded that when non-Whites entered a previously all-White neighborhood consisting of single-family residences and there were no other changes in the neighborhood that the prices of residential property were 3.5 times more likely to increase in value as opposed to decrease in price and that those prices increased in greater amounts compared to decreases in price. So there's a fair amount of analysis that reveals that, in fact, the opposite is true when African Americans moved into White neighborhoods, the valuations actually went up, not down. When you think about it, it sort of makes sense because real estate agents were engaged in the practice of block-busting during this time. In other words, neighborhoods that were primarily White would essentially engage in panic selling at low prices, and then real estate agents would flip those properties at high prices to African Americans which has the effect of actually increasing value and increasing prices, contrary to the assertion in the external and structural factors that it drove down prices. So what's the impact of all of this? The exact figures are not available, but if you look at it on a county basis, it reveals a clear pattern of redlining in center city areas and all sorts of abundant loan activities in the suburbs. And I've given a few sort of statistics that corroborate that. Basically, during the time period from 1930 to 1960, scholars have demonstrated that fewer than 1 percent of all mortgages in the United States were issued to African Americans. Solet's now turn to what's going on in the African American community because it's important to look at the internal factors. What is the response to these external and structural factors that have included this notion of race in real state value? So throughout the urban areas in the North, the development of Black-owned businesses was driven in large part by a growing demand for such institutions driven by the Great Migrations. As we talked about previously, you have thousands, tens of thousands of folks moving to the cities across the United States, and it just fuels a huge demand and cerates a huge consumer market that was largely scorned and ignored by White brains. For example, African Americans found limited banking service options at traditional White-owned financial institutions who typically refused to lend to them or even seek their deposit business. So the overall impact of the growing African American communities combined with rigid segregation that was often enforced through violence created a separate racialized economy that provided market conditions conducive to the rapid growth of Black-owned business districts in many cities supported by emerging working class with often "race banks" at the pinnacle of this business in economic structure. So what are we talking about with "race banks"? So, from 1900 to 1934, 130 African American-owned banks were established throughout the United States, including three in the 1920s in very quick succession, which I'll talk about here in a minute. In addition, there were 73 African American-owned building and loan associations that were in operation, and these provided mortgages with reasonable terms and conditions to African Americans. Just looking at Philadelphia, for example, the 19 building and loan associations in Philadelphia that were Black-owned originated at least 1,216 mortgage loans to African Americans, providing a fair amount of capital in homeownership credit to the Philadelphia African American community. That being said, they certainly raced capital and liquidity limitations, market constraints, and dealt with asset depreciation issues. But the founders of the "race banks" viewed such institutions as essential for economic development and wealth creation in Black communities. They provided capital for business development and mortgages for homeownership, but just as importantly, these were not just business endeavors but rather essential elements of Civil Rights advocacy. The leaders of "race banks" protested against racial discrimination and pushed for the passage of Civil Rights legislation, viewing Black-owned banks as a platform to implement economic self-determination as a means and a tool to challenge White discrimination and oppression. So I'll run through sort of a very quick few examples of what these institutions look like. Andrew Stevens and Edwin Brown opened the Brown and Stevens Bank in Philadelphia. It was a huge success. It opened several branches, opened a subsidiary bank, and had over $1.5 million in assets with 11,000 depositors. It provided support to the Black community in numerous ways. It employed African Americans, allowed for wealth accumulation with interest on deposits. It provided credit to borrowers to finance businesses or homes, and in turn, all this money was invested in the African American community through salaries, dividends, interest, and investments. Unfortunately, following a run on the bank, it collapsed in 1926 due to speculative investments and a lack of liquidity, and that is an image of what the bank building looked like at the time on South Broad Street in Philadelphia. Likewise, the Keystone Cooperative Bank was established by John Asbury. The bank had grown by 1926 to about 2,000 customers with $100,000 in small accounts. So it was a relatively small institution, but after the collapse of Brown and Stevens, Asbury realized that his bank was potentially in trouble due to low amount of liquid assets and reached out to Richard Wright who owned the other Black-owned bank in Philadelphia, the Citizens and Southern Bank and Trust Company. On January 4th, 1927, Asbury announced that Citizens and Keystone had merged into a single institution, and it represented the first time the two "race banks" had successfully consolidated resources through a merger. And it was hailed in the African American press as "evidence of a desire to cooperate for the future prosperity of the race." But with this foundation of a "race bank" supported by the community, both Stevens and Asbury engaged in traditional Civil Rights effort through the political process, as they were both elected as members of the Pennsylvania House of Representatives. Following a brutal lynching outside of Philadelphia in 1923, Stevens is able to successfully fight for it and get the passage of an anti-lynching law in the State of Pennsylvania. It had been unsuccessful at the Federal level, but Stevens was able to fight for passage of that legislation in the State of Pennsylvania. Likewise, the rising tide of migration from the South to Philadelphia exacerbated racial prejudice and tensions, and it essentially resulted in de facto segregation in Philadelphia. African Americans were banned or segregated in many public accommodations, including schools, restaurants, hotels, and the theaters in Philadelphia. So we like to think sometimes that segregation was just sort of a Southern thing, but it was not. It was also quite prevalent in the Northern cities of the country, as exemplified by Philadelphia. Asbury, who was actually removed from a theater, a segregated theater, responded by introducing what became known as the Asbury Equal Rights Bill, and it was designed to guarantee equal Civil Rights for all citizens of Pennsylvania, regardless of race in places of public accommodation. He was successfully able to get it through the House, but eventually, the bill died in the U.S. Senate. But, nevertheless, these efforts show that Black "race banks" were not just financial institutions but also served as vehicles to engage in traditional Civil Rights advocacy. Finally, the final bank in Philadelphia was Citizens Bank. It was founded by Richard Wright. He was born an enslaved person in Dalton, Georgia, in 1855, just a remarkable information. He graduated from Atlanta, became president of what we know today as Savannah State University, but one day, hie daughter was insulted in a local bank while attempting to make a deposit. Wright demanded an apology from the bank's president, and the bank's president refused, and Wright vowed to start this own bank. And it did just that. At the age of 66, he left the South and opened up Citizens and Southern Bank in Philadelphia. He purposefully designed it to counter discrimination and fraud in the mortgage market. He set up a trust company to provide a full range of financial services to African American homebuyers. He promoted savings to achieve homeownership and protect African Americans from real estate sharks. The bank was a tremendous success. He established and was the first president of the National Nego Bankers' Association. So, again, Wright used the platform of his financial institution to address and create sort of economic self-determination as well as build institutions such as the National Negro Bankers Association. So, in conclusion, one of the primary explanations for the large racial wealth gap in this country is the historical and structural discrimination in the credit markets, including the practice of redlining, which was driven by both external factors as well as structural factors that limited access to traditional sources of mortgage credit for African Americans as well as devaluing African American community. Despite such obstacles, African American communities built institutions. They built "race banks" which provided capital for business development and mortgages for homeownership, and just as importantly, they were not simple business endeavors for rather essential cornerstones of Civil Rights advocacy. And here's a list of references, which is also included in the deck. And with that, I will turn it over to Varda and the Department of Justice. >>Ms. Varda Hussain: Thank you so much, Charles, for that awesome presentation. I am going to ask Tracey to please help me advance the slides. Great. We have the first slide up. Well, thank you so much, Dr. Brown. Many thanks to the CFPB for inviting me to join you today. The CFPB is a critical partner in the enforcement of Federal fair lending laws, and I'm real excited to be part of today's webinar. Just a quick disclaimer. The views expressed during my presentation are my own and do not represent the views of the Department of Justice of the United States. In addition, the information provided by this presentation is not intended to provide legal advice. So, during today's presentation, I'm going to walk you through how DOJ has addressed redlining, and I'm also going to discuss with you some details about the Department's view Combatting Redlining Initiative. Given the time, I might move more quickly through some of these slides just so we have enough time for discussion and question-and-answer. Next slide, please. Great. I believe there is one slide above this, DOJ's Authority. Great. So, just for level-setting purposes, I wanted to lay the groundwork about what is the Department of Justice's authority to enforce fair lending laws. Our enforcement authority comes from both the Fair Housing Act and the Equal Credit Opportunity Act. In addition, our enforcement is focused on pattern or practice cases. What does that mean? Because our authority only extends to what we would consider to be pattern or practice or multiple instances of discriminatory practices, we do not prosecute matters involving just individuals, and individuals who believe that they may be victims of lending discrimination should contact their appropriate regulatory agency. And, finally, DOJ has authority to enforce ECOA and FHA on its own initiative or upon referral from another agency. This means that we can initiate our own investigations, or we can open up the investigation based on a referral from another agency. Next slide, please. So what is redlining? I won't dwell too much on this as Dr. Nier has already gone through the definition of redlining, but there are a couple of things that I wanted to highlight. First, DOJ considers redlining to violate both the Fair Housing Act and the Equal Credit Opportunity Act. Redlining has been a persistent discrimination issue, and the Department has been bringing redlining matters for decades. While we have seen many lenders change their practices and adopt good compliance management systems, we continue to see the occurrence of redlining, and we treat it as a persistent problem. As such, we continue to bring redlining cases and open investigations, and during the course of this presentation, I'll discuss some of our recent and past settlements. Next slide, please. So how does DOJ investigate redlining? Our investigations focus on mainly four categories of evidence to assess a bank's efforts to serve communities of color. One of the factor we look at is what we call a "CRA assessment area," and for those of you who are not familiar with that factor, some lenders are required under the Community Reinvestment Act to delineate, to literally show on a map which areas they intend to provide lending services in. In the course of our investigations, DOJ reviews maps to determine whether the lender has drawn the assessment area in a way that indicates avoidance of serving communities of color, and I have a sample map later in this presentation to show you to more clearly illustrate what this factor might look like in practice. A next factor are the location of branches or LPOs, loan production offices. As part of our investigation, we plot exactly where a branch or an LPO is located, and once those are plotted on a map, we look to see where there is any pattern that indicates an avoidance of serving communities of color. That could present itself as carving out an urban core either by a horseshoe shape or the donut hole, and later on in the presentation, I'll have an illustrated map to make this more clear. We also look at marketing, advertising, and outreach, and so how is a lender marketing its credit product specifically, and what is the reach of its marketing? And, finally, we conduct statistical analysis of data collected pursuant to the Home Mortgage Disclosure Act, or what we call HMDA data. When we look at HMDA data, we're looking at the number of loan applications that a particular lender has drawn from census tracts, and we analyze to see if there are differences in those application rates through the lens of race or ethnicity. So, for example, we would compare application rates from a majority-White census tract that's within a lender's assessment area to application rates in a majority-Black census tract to determine whether there are statistically significant dis parities resulting from those application rates. One thing that's really important to mention is that redlining is a multifactored analysis that's based on a review of several factors, and determination of whether a lender has engaged in redlining is based on totality of the circumstances and the facts of a particular matter. In plain speak, that means that we may not have all of these factors listed on this at present, but based on the totality of the circumstances, DOJ will make a determination of whether or not the lender has, indeed, engaged in redlining. Next slide, please. So let me now turn to the Combatting Redlining Initiative. Many of you have seen the announcements in October of last year. Attorney General Merrick Garland and Assistant Attorney General for Civil Rights Kristen Clarke announced an unprecedented and coordinated effort to combat redlining. I won't be able to capture the eloquence of their full remarks, but you can find those on DOJ's website. I did include a few excerpts that I won't read out loud but share with you that I think underscore how seriously the Department of Justice is taking the problem of redlining and how aggressive and committed the Department's response will be to this persistent problem. Next slide, please. So how is the Combatting Redlining Initiative unprecedented and groundbreaking? For several reasons, as shown on this slide. First, the U.S. Attorneys' offices which fall under the Department of Justice, will be acting as force multipliers, and we will be partnering with them to enable investigations on a much more broader scale than we ever have before. Second, the Department will be looking at both depository or what you might think of as banks with a physical brick-and-mortar presence as well as non-depository institutions and analyzing application rates to determine whether or not a depository or non-depository institution has engaged in redlining. Also, our enforcement is going to draw upon strong partnerships with regulatory agencies, such as the CFPB, and lastly, the initiative will be informed by outreach to consumer advocates and industry stakeholders, State Attorneys General, and other agencies. And I should mention that that list of stakeholders is meant to be quite inclusive because the Department believes that the persistent problem of redlining needs the input and the perspective of advocates, industry, State AGs, and other agencies. Next slide, please. So this slide notes two recent redlining enforcement resolutions. The first resolution in a matter that was brought jointly with the CFPB was with Trustmark National Bank, and the second resolution was with Cadence Bank. We'll use some of these recent matters as well as a past matter of BancorpSouth to highlight what some of these redlining factors that I discussed earlier have actually presented themselves in a particular case. Next slide, please. So one of the factors that we take into consideration, as I mentioned, are branch and loan production office locations, and the questions that we ask now only include the basic geographic questions of where are these located when you plot these on a map. We also ask qualitative questions: Where are the loan officers located? And it might be a little bit difficult to see the map. When you guys have it, you'll be able to blow it up and see it more clearly, but as this map illustrates, in one particular matter, 1 out of the 13 branches of this particular lender was located in a majority-Black and Hispanic neighborhood, which meant 12 of the 13 branches were located in majority-White neighborhoods. In addition, the bank assigned most branches in majority-White areas, one or more loan officers, and no loan officer was assigned to the sole branch in a majority-Black-and-Hispanic neighborhood. This gives you an idea of what does it actually look like when we say that we're taking a look at branch and LPO locations as well as some of the qualitative factors, such as where mortgage loan officers are located. Next slide, please. So another major factor is, as I discussed, the CRA assessment area, and this map, which is actually taken from an older case in BancorpSouth, demonstrates how a bank's CRA assessment area can carve out urban areas from its self-delineated service area. And, in this case, the bank's assessment area resulted in the bank excluding 97 percent of communities of color in Memphis. So, as I mentioned before, while not, you know, all redlining matters might have this particular factor present, you can see that when it does, you really can see how the map demonstrates an avoidance of serving communities of color. Next slide, please. Another factor is marketing and outreach. In the interest of time, I won't spend too much time on this particular fact pattern and you can read how this particular factor might present itself in a matter, but I will note that the Department looks closely at marketing strategies of lenders. And we consider not only whether or not traditional marketing materials such as print, newspapers, and flyers makes good communities of color, we also examine digital and online practices and whether a lender is using factors that could exclude communities of color, such as ZIP code, whether or not marketing and outreach is basically tied to a radius of a particular branch. And if the branch is not located in a majority or minority census tract, you can see how the marketing itself would not reach any community of color. Income as well as other filters that could have an impact on communities of color is also considered by the Department. Next slide, please. So what do our settlements typically include? In our resolutions, we have a couple of factors or a couple of settlement terms that we include in our redlining matters because we have found these to be especially effective in addressing the problems of redlining. First are loan subsidy funds that we have seen be very successful in generating additional lending opportunities in previously redlined areas. Our settlements also often include a mandate that there be a new physical location in a previously redlined area. It also includes provisions for outreach and consumer education, and we also make sure to include training and changes to bank procedures that we have found to be very effective in helping lenders continue to monitor for a risk and to address it quickly. Next slide, please. This particular slide outlines specific settlement provisions in our most recent redlining resolutions. First, in United States and CFPB v. Trustmark, that redlining resolution resulted in a $3.85 million loan subsidy fund that's targeted at majority-Black-and-Hispanic neighborhoods, $400,000 towards community partnerships to increase access to residential mortgage credit, $1 million towards advertising, community outreach, and credit repair and consumer financial education. And then also, the establishment of one loan production office in the majority-Black-and-Hispanic area. In the redlining resolution with Cadence Bank, the terms include around $4 million in a loan subsidy fund targeted at majority-Black-and-Hispanic neighborhoods, $750,000 towards community partnerships to increase access to residential mortgage credit, and $625,000 towards advertising, community outreach, and credit repair and consumer financial education, and then the establishment of one branch in a majority-Black-and-Hispanic area. Next slide, please. So how can you learn more? We have all of our complaints of recent fair lending, especially redlining complaints, as well as consent orders on our website, and we encourage people to review those to form their own understanding of how to identify risk early on. We also have on our website our speeches and our press releases as well as reports to Congress that we're mandated to provide under the Equal Credit Opportunity Act, and I put the links here. So, with that, let me turn it back over to the moderator to see if there are any questions. >>Dr. Brown: Thank you so much. I appreciate that Varda and all of our speakers. Desmond, Charles, it's been great. We do have a lot of questions. I thought at first, we weren't getting any, but a lot of them, I think, were going privately to the Events Team. So let's look at what we have coming in, and, Charles, I think several of them were for you. If you've had a chance to review t hem, feel free to jump in. In the meantime, I'll go through and see which ones are there. Let's see. It looks like there's one that says in response to the question—oh, I think we already—Charles responded to that one. Someone told a personal story of discrimination that a parent faced at Citizens Bank, and he explained that it was sold in 1960, that it was no longer a Black-owned bank. And I put up a link where anyone that experiences discrimination can go an file a complaint online or get the number to do it by phone with the CFPB, and we handle thousands of complaints a month. And the financial services organizations have to, after we've inquired, get back to us within 15 days with a response that's at least we're looking into it. And I think I just saw online that somewhere over 90 percent of complaints get a response and get resolved, so encouraging for practitioners to help their clients know about this as well. Okay. Let's see here. >>Dr. Nier: Hey, Heather, I did get one question privately that I wanted to answer. It was a question about whether redlining is against the law, and they hadn't heard anyone definitively say that. Let me definitively say that redlining is against the law. It does violate the Equal Credit Opportunity Act as well as the Fair Housing Act. So I just want to make sure that is clear. Both the CFPB and the Department of Justice have prioritized redlining, and it is clearly against the law, and a number of courts have weighed in on that issue and have agreed with that. >>Dr. Brown: A great question and great answer. Thanks, Charles. I have a question to all panelists, so anybody who wants to jump in can. How do you analyze differential offers of credit? For example, higher interest rates, higher closing costs even when a loan was made. So I think they are saying that there are different offers that people get, and the interest rate may offset some other fee that you pay, and so how do you determine it? And it's a good question because it is a challenge. Does anyone want to answer? >>Ms. Hussain: I can take a stab at that, Heather. So this presentation has, of course, focused on redlining, but to be clear, both the Department and the CFPB focus on all types of fair lending discrimination matters, including discrimination in what we call denials or underwriting, whether or not there's discrimination in the approval or a denial of loans, as well as pricing discrimination matters. So, even if a loan has been approved and borrowers have received a long, are there differences in pricing that can be attributed to a factor that's prohibited by the Equal Credit Opportunity Act or by the Fair Housing Act? And a list of our pricing discrimination matters can be found on DOJ's website, and we certainly do look at HMDA data to determine whether or not there is as risk across the board, whether it's redlining, underwriting, or pricing discrimination. >>Dr. Brown: Thank you so much, Varda. And I imagine when people are doing examinations, they are trying to also control for those variables, so pulling samples that—looking for things that are all the same and then seeing what statistically happens as well. Let's see. We also have a question that came in that said—and this is for you also, Varda—can you explain why loans in gentrified communities qualify for CRA credit, as the prices of these homes almost always are out of range for LMI borrowers? >>Ms. Hussain: So I will say that I am not a CRA expert, but if I'm understanding the question correctly—or let me rephrase the question. That might be, does the Department of Justice consider purchase loans in areas that we are alleging are redlined as we consider whether or not redlining has occurred? And the answer is no, we don't consider purchase loans. The loans that a lender may have purchased for the purposes of qualifying or getting credit under the Community Reinvestment Act are not loans that would be considered in our analysis of whether or not there are disparities in application rates. Hopefully, that answers the question. >>Dr. Brown: Thank you. We have another question that was sent in privately: Perhaps the Fair Housing Act of 1968 which made redlining illegal should be mentioned. Did I miss that? So I think Charles had addressed the Fair Credit Act, but it sounds like there's another—some other legislation that we may want to look at, Fair Housing Act of 1968. >>Dr. Nier: Neither statute explicitly says redlining in it, but both the Fair Housing Act as well as the Equal Credit Opportunity Act have been interpreted by courts to cover the practice of redlining. So, in the actual text of both laws, you will not find the words "redlining," but the language that prohibits discrimination in credit transactions has been interpreted to, in fact, cover the practice of redlining. >>Dr. Brown: Thank you, Dr. Nier. I appreciate that. Okay. And it looks like we have another question to panelists. This person said they thought they—I think she said she's thinking she saw a documentary about block-busting that showed that Black families who bought properties in previously White neighborhoods ended up losing value, and that seems to contradict what Dr. Nier was saying about property values going up. What am I missing? >>Dr. Nier: So I think what was presented as the data was essentially the short-term trends on what happened to property values after African Americans moved into the neighborhood or a neighborhood began to transition from a White neighborhood to a Black neighborhood, which sometimes happened very quickly. Over a course of less than a year, a neighborhood could go from all White to all Black, driven by the exploitive practices of realtors engaging in block-busting. So the studies mainly looked at the sales data during that specific time period. When you looked at that data, it showed increases in value, which makes sense because essentially realtors were encouraging Whites to sell low and Blacks to buy high, which would drive up property values. And I also had another interesting question in the chat: Well, wasn't this increase in property valuation directly attributable to discriminatory practices? And the answer is yes. The reason why at least in the short term there was appreciation in property values was because of discrimination. Realtors were able to capitalize on the discriminatory notion of valuation in race to encourage Whites to sell quickly, playing off that discriminatory stereotype, and then flip neighborhoods very quickly. Now, I think there's sort of a different question that's being asked about what are the long-term implications of valuation in African American neighborhoods, and that's, I think, a different question. It's a good question of whether those values then were sustained over a long time period, and I think probably the answer to that question is probably not, given sort of the multitude of discriminatory factors that were impacting neighborhoods as they transition from White to Black, particularly the disinvestment in those neighborhoods, which over the long term had negative connotations to valuations in those areas. But the studies themselves were focused on sort of that immediate question and that immediate time when neighborhoods were basically flipping from White to Black, what was happening with property valuation. >>Dr. Brown: Thank you, Charles. There's another question for all panelists, and it's also a compliment that they enjoyed the session and found it very helpful. The question is, what do you feel is the biggest barrier to Black and Hispanic homeownership today, and with housing prices rising higher and higher, is there any way to help borrowers who have low income overcome the high cost to enter into homeownership? >>Dr. Nier: Go ahead. >>Ms. Hussain: I was just going to say that, Charles, I don't know if—you know, I don't want to speak for the CFPB, but I think that the recent blog post that you have had on the Special Purpose Credit Programs as well as the advisory opinion on Special Purpose Credit Programs demonstrates that that could be a very powerful tool in combatting the prices of homes as well as increasing homeownership among communities of color. Maybe I answered that question for you, but I do think that taking a look at the advisory opinion on Special Purpose Credit Programs and taking a look at HUD's recent opinion as well may point a way to a tool that could be used with greater frequency. >>Dr. Nier: Just to sort of follow up on that point, I think one of the biggest barriers is access to fair and equitable, affordable credit, as you heard about the Department of Justice as well as the CFPB continue to engage in initiatives and efforts to combat redlining because it does cut to sort of a significant barrier to homeownership is access to credit. There's just no real way to enter the ranks of homeownership without access to credit, and the Bureau as well as DOJ continues to engage in efforts to fight redlining and impact on access to credit. It definitely is an interesting time, and here I think the question sort of referenced rising prices and things like that, which further compound sort of affordability questions. There was a fascinating article in the Washington Post this week about a lot of the homes being purchased in minority neighborhoods are actually being purchased by investors who are then sort of turning around and trying to profit off their purchases. So it's a great question and a very complex one that's got a lot of different factors in terms of access to credit, affordability, and in competition in the marketplace. >>Dr. Brown: Wonderful. There's several more questions. Did somebody else want to comment on the panel? >>Dr. Nier: No. Heather, I wanted to address one question that I saw in the chat. Someone asked, how can I find out what is my bank's CRA assessment area? It is admittedly a multistep process, but you can actually download CRA files from the FFIEC website, and I wanted to make sure that people had it. It's www.FFIEC.gov/cra/craproducts. There, you can download files. If you're still wanting to learn about what is a CRA assessment area, it would be good to review some of the basic information about who is obligated to report because not every lender is obligated to report their assessment area, but I wanted to make sure I provide that resource. >>Dr. Brown: Thank you so much. We have a lot of other great questions in there. Unfortunately, we are out of time. I appreciate everybody's participation. I also want to thank our Events Team, Susan Funk and Tracey Wade, for all they did throughout the whole registration process as well as helping to facilitate this to be a success. Thank our speakers and our leadership for allowing us to have the webinar, and if you have additional questions that you really would like answered that didn't get answered today, I'm putting the CFPB FinEx box in the Chat, and you can send that to the box. And it's in there now, and we'll do our best to get the answer to you that you're looking for. Thank you for attending, and we will send out the slides to everybody on the call, and we will be posting the recording in the coming weeks. So have a great day everyone and look forward to seeing you at a future webinar. Take care.