THE BANKING CRISIS
tal for Special Surgery received $1
million from the Lehman Brothers
Foundation. So far this year, it has
received only $400,000.
According to an article in
The Boston Globe, the Housing
Partnership Network, which is
a nonprofit affordable-housing
business alliance in Boston, is
looking for new insurers, lenders
and philanthropic support
to keep it running after three
.
years of support from Merrill
Lynch & Co., Fannie Mae, Freddie
Mac and AIG.
Likewise, the Initiative for a
Competitive Inner City in Boston,
which has received more than
$100,000 annually from Merrill
“”
Lynch, is waiting to hear whether
it will continue to receive that
money. MATCH, a charter school
in Boston, has lost $20,000 a year
from Lehman to fund a program
to buy books every month for its
200 students.
EQUALITY IN HOMEOWNERSHIP
A Sordid History
BEFORE THE CIVIL RIGHTS ACT OF 1968,
which made it illegal to refuse “to sell or rent a
dwelling to any person because of his race, color,
religion or national origin,” Black borrowers were
required to make higher down payments and
were pushed into repayment
schedules that required them to
pay off their homes at a faster
rate than whites.
While the Civil Rights Act
helped—the number of Blacks
owning homes increased to
nearly 3 million by 1970, up
4 percent from 1960—it still
wasn’t enough to correct the
prejudices. A Cleveland
study revealed that 70
percent of companies in
the 1970s still practiced racial steering, the
act of pushing certain groups of people, often
Blacks and Latinos, into certain neighborhoods. Blacks were still overwhelmingly pushed into
bad loans or flat-out denied home loans.
Subsequently, Congress passed the Equal Credit
Opportunity Act in 1974, which made it unlawful for
creditors to discriminate against applicants because
of their race, and in 1975 it passed the Home Mort-
gage Disclosure Act, which required that financial
institutions record and disclose
data about home purchases.
In 1977, Congress passed the
Community Reinvestment Act,
which was amended in the
1990s and this decade, requir-
ing banks and savings-and-
loan associations to offer credit
to lower-income individuals
and smaller businesses.
But despite these
congressional efforts, banks
and mortgage lenders still
found innovative ways to continue marginalizing
low-income people, especially Blacks and Latinos.
Lenders no longer denied these underrepresented
groups loans; they simply sold them loans that were
more than double the market rate.
