“I heard that 80 percent of car accidents occur within one mile of a person’s residence, so I moved.” But it turns out that moving doesn’t improve your driving, although it does improve lender’s volumes. Home Bay just published a survey that found 75 percent were happy with their decision to move. But 86 percent of Americans who moved in 2023 have regrets about moving, up from 75 percent in 2022. With many movers charging by size and weight, 24 percent of Americans wish they downsized their belongings before moving. Other common regrets include missing their old home (24 percent) and that moving was too expensive (20 percent). What’s more, nearly half (46 percent) of Americans shed tears and 42 percent fought with their loved ones during the moving process. The top reasons for moving in 2023 were to improve their quality of life (31 percent) and upsize their home (21 percent). If money were no object, the states Americans most want to move to are California (32 percent), New York (29 percent), and Florida (24 percent). However, migration data from Allied Van Lines shows more affordable states such as Montana, Vermont, Arkansas, and Idaho have the highest percentage of inbound moves. (Found here, this week’s podcast is sponsored by Lender Toolkit. With Lender Toolkit’s AI-powered AI Underwriter and Prism borrower income automation tools, you’ll be able to get loans approved in under two minutes. Hear an interview with Lender Price’s Dawar Alimi on specific ways that lenders are benefiting from seamless integrations.)
Lender and Broker Services, Products, and Software
ICE is making servicing simple with the next generation of MSP®, the industry’s best-in-class loan servicing system. The new experience will include a “conversational intuitive interface” that will modernize workflows, allowing back-office users to simply type in a description of a servicing task, using common business language, and the software will automatically curate the relevant information they need to perform their work. Not only will its new interface save time for existing users, but it will also help new employees get up to speed faster by making the system intuitive to pick up and easy to navigate. Learn more about the new MSP experience here, as Bonnie Sinnock, capital markets editor for National Mortgage News, previews the upcoming technology in an article that ICE has made available as a complimentary download.
In the wake of frequent breaches within our industry, we are reminded of the precarious position mortgage lenders and their customers’ data are currently in. These repeated security incidents emphasize an undeniable truth: robust cybersecurity defenses are not merely an option; they are imperative. A breach can mean the difference between a thriving business and a devastating collapse. There is a very real risk to mortgage companies right now; you’re not just guarding data, you’re safeguarding trust, livelihoods, and the very integrity of the financial system. It’s a responsibility to take seriously, and it’s time to double down on cybersecurity. Richey May’s cybersecurity team is here to help: Check out its latest post detailing the often-overlooked risks in the industry.
“When you partner with a subservicer, you’re entrusting them with your most valuable assets: your customers and your reputation. Knowing they are important to you, they must be important to your subservicer, and you must see it in their actions. They should provide the care to your customers that reflects your brand and deepens the positive relationship you created at origination. If they are falling short, then your best option is to partner with Servbank. Not only do we provide your customers with a best-in-class experience, but we do it with your branding and identity in all communications and interactions. It’s as if you’re the one providing service to them, and with 99 percent customer satisfaction rates, which will help make them your customers for life. It’s your business. Servbank believes it ought to be your branding, too. Learn more about Servbank.”
Heading to ICE Experience in Las Vegas this year? The Total Expert team will be at booth #513 to show you how to uncover more loan opportunities, streamline your workflows, and unlock your organization’s full potential with our enhanced Encompass integration. Supercharge loan officer productivity and drive unprecedented growth with new features and functionality that allow you to seamlessly share data between platforms, create loan files with one click, and more. Drop by our booth at Ice Experience or book a personalized demo to see firsthand how the Total Expert + Encompass integration will transform your day-to-day operations, drive growth, and help you close more loans in any market!
Webinar: How to Build a Comprehensive QC Plan! Learn how Credit Unions can enhance operational excellence while minimizing risk exposure by having a solid quality control plan in place. Former CUSO Quality Control manager, Brock Miler (CMQ/OE) and EVP at ACES, Kyle Kehoe will review industry requirements and best practices to ensure credit unions remain steadfast in their commitment to quality. Date: Wednesday, March 20th at 11:00AM PDT. Topics Covered: Importance of having a sound QC Plan, review each component of the QC plan, best practice on how best to succeed within each category, how to leverage technology to maintain operational excellence and lower risk exposure within your QC program. Register for the webinar.
TPO Product News
Do you want to expand your footprint into the Non-Agency space, but are apprehensive of the underwriting challenges? Lakeview is your solution. Within the Bayview Non-Agency Product Suite, you decide the best underwriting route by product: Delegated or Non-Delegated. Included, are live, comprehensive trainings empowering you with the expertise desired. Still unsure? Let us know, and we will help you step forward.
HUD Secretary Steps Down
HUD’s Marcia Fudge announced that she will step down as secretary of the Department of Housing and Urban Development, effective March 22. A Biden appointee, Fudge, 71, did not provide a specific reason, although that job can’t be without its challenges. I met her a few times, and was always impressed. Adrianne Todman becoming Acting HUD Secretary.
Accolades immediately flooded in.
MBA’s President and CEO Bob Broeksmit, CMB: “MBA thanks Marcia Fudge for being a trusted industry partner and champion of improving affordable homeownership and rental housing opportunities for all Americans during her three-year tenure as HUD Secretary. We commend Secretary Fudge and her staff for their contributions on numerous issues, including working with the industry to ensure struggling borrowers could remain in their homes through COVID-19 forbearance relief and other loss mitigation reforms, making homeownership more affordable by lowering mortgage insurance premiums, increasing multifamily large loan limits for the first time in nearly a decade, and implementing improvements to existing HUD programs to boost single-family and multifamily housing supply.”
The National Housing Conference’s (NHC) President and CEO David M. Dworkin: “Secretary Marcia Fudge’s tenure at HUD has surpassed all expectations, including her own, earning her recognition as a highly consequential HUD Secretary. Throughout her leadership, Secretary Fudge has been a steadfast advocate for equitable housing policies, championing initiatives aimed at alleviating homelessness, expanding access to affordable housing, and fostering sustainable communities.
FHFA Director Sandra Thompson: “Secretary Marcia Fudge is an outstanding leader who is a strong advocate for affordable, equitable, and sustainable housing opportunities for all Americans. During her tenure as Secretary of HUD, the country faced numerous housing challenges including recovering from the COVID-19 pandemic, limited affordable housing supply, and the continuing effects of housing discrimination and homelessness. Secretary Fudge took decisive action to address these and other challenges.”
Ginnie Mae President Alanna McCargo: “For the last three years, Secretary Marcia L. Fudge has led the Department of Housing and Urban Development fearlessly and passionately as our 18th Secretary. It has been a great honor to serve under her leadership for her entire tenure, first as her Senior Advisor for Housing Finance, and since 2021, as the President of Ginnie Mae. Secretary Fudge has made history and changed the trajectory of HUD for the future.”
Capital Markets
Make no mistake: 101 courses aren’t just for college freshmen. In fact, mortgage lenders of all experience levels can benefit from Optimal Blue’s upcoming webinar, Hedging 101: The Benefits of Mandatory Delivery. This session will be back by popular demand on Thursday, March 14, at Noon CT. Pipeline hedging experts Jeff McCarty and Mark Teteris, CMB, will walk attendees through the theories behind hedging practices, various hedging instruments, best execution analysis and strategies to employ during market fluctuations. Whether you’re just entertaining the idea of transitioning to mandatory delivery, or you’re already a hedging veteran, you won’t want to miss this informative and directional webinar. Save your seat today.
“Looking to Sell Agency Servicing? Are you getting low, or even worse, no bids because of the size of your MSR portfolio? Want to establish a long-lasting selling relationship? We buy performing Agency Servicing starting at $25,000,000. While others turn down small pools we excel. Discover the value you have been missing. Send us an email or call Shane at 602-402-1599.”
This week opened with investors making last minute bets ahead of today’s highly anticipated February CPI inflation report. A report that could clue market participants in on the Fed’s rate timing. The CPI index likely ran hot in February due to higher gasoline prices, but core inflation was expected to slow further (read on for results!) as car prices fell and rent increases slowed. Americans still aren’t confident about the longer-term inflation outlook: After hitting a record-low in January, U.S. consumer expectations for inflation over the next three years climbed to 2.7 percent last month, according to a Federal Reserve Bank of New York survey. Five-year expectations climbed to 2.9 percent, while projected year-ahead inflation was unchanged from January at 3.0 percent.
With a week to go until the next FOMC meeting, economic data released over the last week reaffirmed there is still a long way to go until Fed officials will feel fully confident that inflation is on an assured path to two percent. For the fourth straight month, the economy added more jobs than the market was expecting. Nonfarm payrolls increased 275k, however the prior two months were revised down by a combined 167k. The unemployment rate increased to 3.9 percent from 3.7 percent, which is a two-year high. Job openings were 16 percent below their number from one year ago and there were 8.86 million openings in January. The share of workers quitting their jobs fell to its lowest rate in six years (excluding spring 2020) which should help slow wage growth later in the year. The labor markets’ continued resilience reinforces the Fed’s view of resilient economic expansion and potentially further delays rate cuts.
Today’s economic calendar is already under way with the February CPI report: hot at +.4 percent on headline and core (ex-food & energy). Headline and core were seen increasing about 0.3 percent month-over-month. Before CPI, we had the NFIB Small Business Optimism Index for February: it decreased in February, marking the 26th consecutive month below the 50-year average of 98. Twenty-three percent of small business owners reported that inflation was their single most important business problem and replacing labor quality at the top.
Later today brings Redbook same store sales for the week ending March 9, the February budget statement from the CBO, and Treasury auctions that will be headlined by $39 billion reopened 10-year notes. After the inflation data, we begin Tuesday with Agency MBS prices roughly unchanged from Monday afternoon and the 10-year yielding 4.10 after closing yesterday at 4.10 percent. The 2-year is at 4.56: not a lot of movement after the CPI data.
Employment
“Arc Home, a Top 10 Non-QM and Non-Agency Originator is on the lookout for an exceptional leader to become our next Vice President of Quality Control. At Arc Home, we pride ourselves on fostering a culture of innovation, integrity, and growth, offering an environment for professional development and work-life balance. This position is your chance to contribute to our mission of creating an optimal client experience and to shape the future Arc Home. If you’re an experienced mortgage pro with a passion for compliance and operational excellence, we want to hear from you. Apply on our careers page or connect with Jacki Renard for a deeper insight into how you can elevate your career and make a difference at Arc Home.”
Megastar Financial Corp. is thrilled to announce John Owens as EVP and Chief Strategy Officer! With over 20 years in the mortgage industry, Owens brings a wealth of knowledge and an impressive record of success to Megastar. In his new role, he will drive sales growth, foster industry relationships, and demonstrate how modern lending solutions are game changers for lending teams. Owens stated, “One of the many reasons I joined Megastar is because they have adopted agency technology along with AI that significantly lowers production costs, while increasing transaction speed and customer service. Pre-qualifications or approvals can be delivered at the time of application, a game-changer for any loan officer aiming to stand out. Additionally, Megastar’s unique program, powered by its financial strength, supplies qualified leads directly to loan officers. This holistic approach elevates service, making MegaStar a leader in customer satisfaction and efficiency.” Connect with John on LinkedIn.
Take your business to new heights with OceanFirst Bank. Steve Adamo, President of Residential and Consumer Lending continues to expand OceanFirst Bank’s Residential Lending division. As a result, top producing Loan Officers have joined the Bank. With the ability to blend the benefits of an independent mortgage company with the stability of a banking environment, OceanFirst Bank is growing exponentially. Loan Officers that join the team have the ability to grow their business and gain stability from a top financial institution. OceanFirst combines a leading-edge tech stack and the benefit of having great product and pricing with unique portfolio options, direct agency lending, and secondary market choices. OceanFirst’s National Association allows Loan Officers to lend nationally without dealing with individual state licensing. Contact John Costa, Senior Vice President and Head of Mortgage Sales or 609.444.6121 to learn more. FDIC | Equal Housing Lender | Equal Opportunity Employer.
“Did you know Movement Mortgage added more than 1,000 new products to its portfolio in 2023!? You read that correctly. And the list keeps growing. Introducing Movement’s HomeReady Very Low-Income Purchase Program! With the escalating costs of homeownership, many potential borrowers, particularly those with limited income, encounter significant hurdles in affording a down payment. This new addition to the HomeReady product, wherein qualifying borrowers can receive a $2,500 down payment credit, aims to enhance homeownership opportunities for individuals with qualifying income less than 50 percent of the area median income (AMI). For more information on this new offering and how Movement is making an impact in communities across the U.S., visit us.”
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Despite decades of anti-discrimination legislation and other efforts to fight redlining, create fair lending, and ban racial and other bias, housing discrimination can still exist in many markets throughout the country, especially for first-time homebuyers.
It can be subtle or overt. Either way, housing discrimination holds people of color, immigrants, families with children, and LGBTQ people back by denying them access to safe neighborhoods, good schools, and the generational wealth that comes with homeownership.
This guide offers more information on housing discrimination and what to do if it happens to you.
What Is Housing Discrimination?
Federal law defines housing discrimination as discrimination concerned with renting or buying a property based on race, color, religion, national origin, sex (including gender identity and sexual orientation), familial status, or disability. In other words, if anyone in the house-hunting or mortgage loan process treats a person buying, renting, or selling housing differently because of any of these reasons, they are breaking the law.
Whether first-time homebuyers are buying a starter home or upsizing, they may want to fine-tune their anti-bias antennas and know the laws. 💡 Quick Tip: You deserve a more zen mortgage loan. When you buy a home, SoFi offers a guarantee that your loan will close on time. Backed by a $5,000 credit.‡
Housing Discrimination Examples
Housing discrimination comes in many forms. It could be a landlord who charges higher fees to renters with children, a real estate agent who refuses to show immigrants homes in certain neighborhoods, or a buyer offering less because of the seller’s race.
What’s more, housing discrimination can be subtle, according to the U.S. Department of Housing and Urban Development (HUD), making it difficult to prove and punish. Here are examples of subtle housing discrimination described on HUD’s website:
An African American man speaks on the phone to a landlord who seems eager to rent to him. But when the man meets with the landlord to fill out the application, the landlord’s attitude is different. A few days later, the potential renter receives a letter saying his application was denied because of a bad reference from his current landlord. But his current landlord says he was never contacted.
An Asian man meets with a real estate broker because he is interested in purchasing a house for his family in a specific neighborhood. When he mentions the neighborhood, the broker tells the Asian man that she has wonderful listings in a neighborhood where there are more people like him. When he looks at houses in the neighborhood she recommends, he notices that the majority of residents are Asian. The man files a complaint. Steering buyers to certain neighborhoods because of race is illegal.
Sexual harassment, failure to comply with accessibility requirements, and rules against renting or selling to families with children are also discriminatory.
Equal Opportunity Housing Laws to Know
Housing discrimination by sellers, lenders, and landlords based on race, color, religion, or nationality has been illegal since Congress passed the Fair Housing Act in 1968. The act was expanded in 1974 to include gender and in 1988 to include families with children and people with disabilities. Additional laws concerning discrimination in mortgage lending are included in the Equal Credit Opportunity Act, passed in 1974.
Some situations are exempt from the Fair Housing Act. These include some types of senior housing and housing operated by religious organizations and private clubs. Single-family rental homes are also exempt as long as the landlord does not own more than three homes and does not advertise or broker the rentals. Owner-occupied properties with four or fewer rental units are not governed by the Fair Housing Act.
States and local jurisdictions may have additional laws regarding housing discrimination. For instance, many states and cities ban discrimination based on age, criminal history, immigration status, marital status, or sexual orientation.
In 2020 the Trump administration made several changes to HUD regulations, making it more complicated for people to prove they are victims of housing discrimination. Specifically, victims had to go to great lengths to show that the discrimination was intentional. In early 2021, President Joe Biden signed executive orders aimed at reversing those changes. Housing discrimination continues, however, and in 2023, HUD announced that it was making $30 million in additional funding available to state and local fair housing enforcement agencies across the country to help fight discriminatory practices.
What to Do About Potential Discrimination
First, become familiar with the federal, state, and local laws that may apply. Knowing the laws and how they work is vital to filing an effective complaint and getting a successful outcome.
If you think you are a victim of housing or mortgage lending discrimination, you can file a federal complaint with the HUD Office of Fair Housing Equal Opportunity (FHEO). This office investigates claims concerning any of the protected classes specified in the Fair Housing Act. You can file a complaint online or mail the complaint form to your regional HUD office or call the Housing Discrimination Hotline at 800-669-9777. The complaint form is available in nine languages, including English and Spanish, and any retaliation for filing a complaint is illegal.
The FHEO is supposed to investigate complaints within 100 days. Sometimes complaints prompt the U.S. Department of Justice to file lawsuits against people or companies that may have violated the law.
You may also want to file a complaint with your state attorney general’s civil rights bureau or your city’s civil rights or fair housing commission. This may be more effective than filing solely with the FHEO, especially in areas with extensive housing discrimination regulations. To find out where to file a complaint in your area, start with the National Fair Housing Alliance website for a list of local agencies.
In addition to the FHEO, mortgage lending discrimination complaints can be filed with the Consumer Financial Protection Bureau. 💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.
How to Make Your Case Proving Housing Discrimination
Extensive documentation can help prove housing discrimination. When you are talking to real estate agents, sellers, landlords, or lenders, it’s a good idea to listen carefully and take notes during each conversation. HUD officials suggest looking for what they call red-flag language. This may occur when a real estate agent is trying to steer you away from or into a particular neighborhood. Phrases such as “This wouldn’t be a good fit for you” or “You’d be happier in this other neighborhood” can be red flags.
If you feel you are being “steered,” you can do an online search to learn if a broker failed to show all of the houses in the local housing market in your price range.
If you suspect lending discrimination, such as being quoted a higher rate than you expected, you can check the posted rates online at that mortgage lender and others to see how they compare. You can take screenshots or print this information.
Keep an eye out for and document surprising obstacles that come up in the home buying or renting process. Perhaps a landlord, seller, or agent has said a property is not available but then you find that it is still on the market weeks later. Or maybe your application to purchase a co-op is denied, but you aren’t given a specific reason why. These may be signs of discrimination. You’ll want to document the situation with dated notes from your conversations and screenshots or copies of the ads showing the property still available after you were turned down.
Local housing advocacy and human rights groups also offer help. Organizations such as the Fair Housing Justice Center may help you conduct tests using volunteers of different races to test for disparate treatment in specific locations. These tests can also provide compelling evidence for your case.
Recommended: Home Affordability Calculator
The Takeaway
Longstanding laws and regulations are not enough to eradicate housing discrimination, but informed buyers and renters can fight back. Make sure you advocate for yourself at every stage of the process.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
Photo credit: iStock/zoranm
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will provide you $2,000.^ Terms and conditions apply. This Guarantee is available only for loan applications submitted after 6/15/22 for the purchase of a primary residence. Please discuss terms of this Guarantee with your loan officer. The property must be owner-occupied, single-family residence (no condos), and the loan amount must meet the Fannie Mae conventional guidelines. No bank-owned or short-sale transactions. To qualify for the Guarantee, you must: (1) Have employment income supported by W-2, (2) Receive written approval by SoFi for the loan and you lock the rate, (3) submit an executed purchase contract on an eligible property at least 30 days prior to the closing date in the purchase contract, (4) provide to SoFi (by upload) all required documentation within 24 hours of SoFi requesting your documentation and upload any follow-up required documents within 36 hours of the request, and (5) pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. The Guarantee will be void and not paid if any delays to closing are due to factors outside of SoFi control, including delays scheduling or completing the appraisal appointment, appraised value disputes, completing a property inspection, making repairs to the property by any party, addressing possible title defects, natural disasters, further negotiation of or changes to the purchase contract, changes to the loan terms, or changes in borrower’s eligibility for the loan (e.g., changes in credit profile or employment), or if property purchase does not occur. SoFi may change or terminate this offer at any time without notice to you. ^To redeem the Guarantee if conditions met, see documentation provided by loan officer.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Combined into a series of federal, state and local laws, your specific renter’s rights get dictated by where you live. They’re in place to prevent things like housing discrimination and rent gouging. These basic rights ensure you have a safe, clean place to live as well as detailed courses of action when things are going wrong.
Landlord-tenant law helps you live peacefully in your rental. Do you know your tenant’s rights?
Fair housing
Before even taking a tour of a potential apartment, it’s your right to have fair access to housing. This means your rental application will not get rejected based on:
Race
Color
Religion
Age
Sex
National origin
Family status
Mental or physical disabilities
Your renter’s rights in this case receive protection at the federal level by the Fair Housing Act. State and local laws may reinforce the Fair Housing Act and even add more categories to this list to ensure everyone has equal access to apply for housing.
Not only can your rental application not get refused based on these factors, but, if you have a disability, landlord-tenant law requires they make reasonable accommodations for you to access the apartment. This could mean installing ramps or making a unit on a lower floor available.
Legal documentation
Another piece to your renter’s rights is the lease. It’s the responsibility of the property manager to give you a legal rental contract to sign that abides by all laws.
In addition to specifics about the property, and breakdowns for processes like requesting repairs, using common areas and more, a lease must clearly indicate the leasing period and your monthly rent. It should also have your name, and any roommates, on the document.
The lease should also include a series of general disclosures. The law requires these, although it varies by state which specific ones must get listed. A few common disclosures you may see in your lease if they’re applicable to the rental unit, include:
Notice of mold
Lead-based paint disclosure
Notice of sex offenders, recent deaths and any potential health or safety hazards
Living space
A variety of rules govern your living space when you’re a renter. This ensures you have somewhere to live that’s actually livable. Tenants’ rights, when it comes to your actual apartment get pretty involved, so make sure you know the highlights.
Habitable housing
It’s not enough for a property manager to provide you with an apartment; the apartment must be safe for you to live in it. This means more than a lack of dangerous conditions. Your renter’s rights entitle you to a home with usable utilities, including heat, electricity and water.
This area of your renter’s rights also means you have a home that’s safe and livable in other ways. Specifics within these guidelines require an apartment to have functioning locks on doors and windows, smoke detectors and a dedicated way to escape in case of fire.
Repairs
This area of landlord-tenant law requires action on both sides. To ensure you have a habitable home, it’s up to you to report any maintenance issues using the process that’s outlined in your lease. Find out the best way to report issues like this to your landlord (such as through email or an online portal).
On the management side, their responsibility is to complete repairs in a timely manner. Your lease will define what this means, but different repairs rank higher in priority. For example, failure to repair a heater in winter can quickly lead to an uninhabitable living space for safety reasons, whereas a garbage broken disposal doesn’t create that serious of an impact.
If your property manager fails to make repairs in a timely manner, you have additional rights. Check with state and local laws about what’s within your rights.
Privacy
Although you’re only renting a home, and someone else owns it, your rights as a tenant mean a certain level of privacy. Once your rental agreement is in place, a property manager cannot come into your home without proper notice.
Notice is also required for more than just repairs. If you’re getting ready to move, and the property manager wants to start showing your unit to prospective tenants, for example, they must give you notice each time.
Security deposit refund
Each state usually handles security deposits differently as far as how much you’re required to put down. It’s normal for you to pay a security deposit though since that protects the property manager from having to pay out-of-pocket for any damages you may cause while living in your rental.
As far a payment goes, some states set caps on how much a property manager can ask for. They also can’t impose a higher deposit for your rental, when compared to other units in the building, without a specific reason, like having a pet.
It’s also within your renter’s rights to get the security deposit back, in a timely manner, if it’s not covering any damages. Most state laws set the time frame at 30 days, and you’ll not only receive your security deposit back but any interest that accrued as well.
If any of your deposit is withheld, you can ask for written documentation of the damages it’s paying for, and the property manager must comply.
Eviction
The situations where your property manager has the right to evict needs clear stating within your lease. Make sure to review them before you sign it.
Standard landlord-tenant law states that you can get evicted if you break your lease in specific ways, such as:
Failing to pay rent
Allowing prohibited animals to live with you
Having roommates that aren’t on your lease
Committing a crime on the premises
As a renter, your tenant rights enable you to address evictable issues within a specified time frame before an eviction can take place. You will receive notice of a pending eviction from your property manager. If you fail to fix the issue, they can then file an eviction with the courts resulting in legal removal from your rental.
State-specific renter’s rights
Although you’ll find many standard regulations associated with renting if you move between states, expect additional laws everywhere you go. Since renter’s rights get regulated on both the state and local level, if you’re relocating to a different part of the country — familiarize yourself with local tenant laws.
Some unique landlord-tenant laws include:
In Hawaii, security deposits with no deductions must get returned within 14 days
A property manager must give 48 hours notice before entering your apartment in Delaware
West Virginia has no minimum notice required for a rent increase on month-to-month rentals
In North Carolina, two month’s rent is the required minimum for a security deposit on a one-year lease
A lease can get terminated once rent is only five days late in Arkansas
As you can see, some states have pretty extreme rules. Being aware of them can help you maintain a positive relationship with your property manager while also protecting your own rights as a renter.
Know your renter’s rights
No matter how great, or rocky, your relationship is with a property manager, you should always follow the law as it pertains to your situation. This not only protects you, but it ensures your property manager gets held accountable when anything isn’t up to par.
Familiarize yourself with state and local landlord-tenant laws, read your lease thoroughly before signing and do your research when faced with a potential issue. Protect yourself by knowing your tenant’s rights.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Lesly Gregory has over 15 years of marketing experience, ranging from community management to blogging to creating marketing collateral for a variety of industries. A graduate of Boston University, Lesly holds a B.S. in Journalism. She currently lives in Atlanta with her husband, two young children, three cats and assorted fish.
The U.S. Department of Housing and Urban Development (HUD) on Thursday joined seven other federal agencies to clarify in writing that Title VI of the Civil Rights Act of 1964 prohibits forms of discrimination, including antisemitism, Islamophobia and other related forms.
To accomplish that goal, HUD published a housing-specific fact sheet about Title VI protections.
“In addition to shared ancestry and ethnic characteristics, religion is also a protected class under the Fair Housing Act, which HUD will continue to vigorously enforce,” the department said in a statement.
The administration unveiled its National Strategy to Counter Antisemitism in May, and HUD has remained a committed partner in its implementation across the federal government.
Reiterating Title VI protections and reminding people of their broader implications is key to accomplishing the administration’s equal housing goals, according to HUD Secretary Marcia Fudge.
“Antisemitism, Islamophobia, and any other form of hate have no place anywhere, including in the home,” Fudge said in a statement. “No one should be discriminated against because of their ancestry or ethnic characteristics or their faith or beliefs.”
She added: “[This] announcement will further the Biden-Harris Administration’s commitment to combating discrimination in all its forms and guide our partners on the ground to enforce this country’s legal protections for Americans against acts of hatred.”
Discrimination based on “shared ancestry or ethnic characteristics” is illegal under Title VI of the Civil Rights Act, and ensuring that fact is understood is key to the White House’s housing policies, according to Demetria McCain, HUD’s principal deputy assistant secretary for fair housing and equal opportunity.
“This announcement is in line with HUD’s continued commitment to combat housing discrimination in all forms,” McCain said. “It informs those who call America home of their right to be treated equally regardless of their shared ancestry or ethnic characteristics–putting us one step closer to building a housing system that prioritizes fairness and equality.”
In alignment with the Biden administration’s national strategy was a coordinated announcement from the other involved agencies, including the U.S. Departments of Agriculture, Health and Human Services, Homeland Security, Justice, Interior, Labor, Treasury and Transportation, according to White House announcement.
An $18.4 million mortgage-subsidy fund resulting from the 2022 Trident Mortgage redlining settlement is now open to eligible borrowers in three Eastern states.
After a combined state and federal investigation last year found Trident — one of the largest mortgage lenders in the Philadelphia area before it ceased originations in 2020 — had regularly engaged in practices to discourage minority borrowing, the now-defunct company agreed to establish the fund under conditions of the settlement. The fund will support Black borrowers and majority-minority neighborhoods in a region that includes parts of Pennsylvania, New Jersey and Delaware.
“This subsidy program will make a difference to many hundreds, possibly thousands, of families impacted by historic redlining practices in Philadelphia,” said Pennsylvania Attorney General Michelle Henry in a press release.
The fund, called Pathway to Prosperity, includes two different programs — HomeAssist and HomeAccess — which will provide as much as $10,000 in financial assistance per qualifying mortgage. The rollout comes after Trident conducted a study to determine the needs of majority-minority communities in the Philadelphia area. Trident is contracting with nonbank lender Prosperity Home Mortgage to administer the fund.
HomeAssist will provide funding for the purchase or refinance of a primary residence located in a qualifying census tract. HomeAccess, meanwhile, is aimed at assisting current residents living in eligible neighborhoods to purchase a primary residence located in any state Prosperity is licensed.
“For too long, companies have avoided offering mortgages in neighborhoods that are home to predominantly people of color, denying them equal access to mortgage credit. This is one small step toward correcting that injustice,” Henry said.
Per the settlement, Trident will also provide consumer financial education and engage in community development partnerships within affected communities. Prosperity will open offices in some minority neighborhoods as well.
Although no longer conducting business as a home lender, Trident had agreed to continue operations to implement terms of the settlement. Both Trident and Prosperity are mortgage subsidiaries of Berkshire Hathaway-owned HomeServices of America, a consortium of companies serving real estate interests.
Following a four-year investigation, Trident was fined a total of $24.4 million, which included a penalty of $4 million owed to the Consumer Financial Protection Bureau for various violations. Among the investigation’s findings were derogatory language, including racial slurs, used in emails between Trident staff, and marketing campaigns that excluded minority consumers. More than half the population of Philadelphia is Black or Hispanic.
Attorneys general of the three affected states participated in the investigation, along with the CFPB and the U.S. Justice Department. All voiced approval of Trident’s program.
“The launch of this important loan subsidy fund marks a critical step in our efforts to redress Trident Mortgage Co.’s mortgage redlining practices, and to begin the process of making whole the communities that have been harmed by generations of systemic housing discrimination,” said New Jersey Attorney General Matthew J. Platkin.
“It will take generations to truly repair that harm — but this subsidy program will make a real, tangible difference for hundreds of redlining’s victims,” added Delaware Attorney General Kathy Jennings.
Redlining, defined as a systematic practice of underserving or discriminating against predominantly Black, Hispanic or other ethnic neighborhoods, has been prohibited since the 1960s with the enactment of the Fair Housing Act. But violations continue decades later, with multiple financial institutions this year involved in redlining lawsuits.
This past spring, Pennsylvania-based Essa Bank and Trust was also fined $3 million for purported infractions in the Philadelphia area. And in January, City National Bank of Los Angeles resolved allegations against it by agreeing to pay more than $31 million, the largest redlining settlement in history. Allegations have similarly hit the likes of KeyBank and HSBC in 2023.
It’s important to understand your rights as a renter.
The landlord-tenant relationship is complex. Each party’s responsibilities can vary by city, state and lease agreement. But federal, local and state laws secure renters’ rights.
The first step in exercising your tenants’ rights is to understand what those rights (and the laws that protect them) actually are. The second is to learn how to take action if someone violates your rights.
In this guide:
The right to fair housing
The Fair Housing Act of 1968 makes it illegal for landlords to discriminate based on race, sex, age, religion, nationality, family status or mental or physical disability. The Fair Housing Act applies to most rental units. There are exceptions for small rental properties, private clubs and religious organizations.
The law protects current renters and prospective tenants from discrimination for any of the reasons listed above. This discrimination can take many forms.
Federal Fair Housing Act protections
Sex, race, family status, age, religion, disability or national origin are examples of protected classes under the FHA. Landlords can’t refuse to rent to or negotiate with someone because of their protected status. They can’t set different terms or conditions, ask a renter to move out or force them to pay different fees or higher rent.
It’s against the law to state that only renters with particular physical and mental abilities or familial status can rent an apartment. The same goes for people of a certain age, race, sex or nationality. This applies to verbal statements and advertising, too. It’s also illegal for landlords to harass, intimidate, bribe or interfere with a renter’s right to equitable accommodation.
Definition of familial status
A landlord can’t refuse to rent to families with kids under 18 or discriminate against people seeking custody of children under 18. Landlords can’t deny legal guardians or pregnant women a home unless there’s a legal reason to do so.
Definition of sex
It’s against the law to only rent to men or women. Landlords also can’t discriminate because of a renter’s sexual orientation or gender identity. The U.S. Department of Housing and Urban Development (HUD) offers resources, especially for LGBTQ+ renters.
Other protected classes
Certain state laws extend additional protections. Some make it illegal to discriminate because a renter receives alimony, child support or public assistance. Others ban discrimination based on physical characteristics like tattoos and piercings.
Search by state to learn about the laws in your area. If someone violates your rights, contact an organization on this list, reach out to an attorney or law firm or file a claim with HUD.
Rights for disabled tenants
The FHA and the Americans with Disabilities Act (ADA) protect renters with physical and mental disabilities. Under these laws, landlords must provide safe and accessible rental homes to residents with disabilities.
The ADA requires that common spaces are accessible. The FHA requires that most apartments, rental homes and condos built after March 13, 1991, include wheelchair-accessible doors, hallways and living spaces. Homes built before that date must have grab rails, accessible outlets and light switches, TTY phone systems, visual alarms and other accessible features put in place. Learn more about your rights in our accessible apartment guide.
If a landlord won’t rent to you or refuses to make reasonable accommodations so you can live in your home, you could file a complaint. Contact a Fair Housing Assistance Program (FHAP) or file a claim with HUD. Hiring an attorney with experience in discrimination claims can increase your chance of success.
The right to a habitable home
You have the right to a habitable home. That means the home you rent is a clean, safe space with access to heat and water. It’s structurally sound and free from pests.
A habitable home isn’t a threat to your physical health. A landlord must provide working safety measures like fire extinguishers, carbon monoxide and smoke detectors and fire alarms in your apartment. Most states require landlords to tell renters about environmental hazards like asbestos or mold before signing a lease.
The Environmental Protection Agency (EPA) and HUD also require landlords to tell prospective renters about lead paint in buildings built before 1978. Both parties must acknowledge the presence of lead paint in writing before the tenants move in. Landlords aren’t obligated to remove lead-based paint, just acknowledge it.
In most other cases, the landlord or property management team is responsible for removing toxins and making the rental home safe to live in. This doesn’t apply to damage caused by the current tenant.
Tenant rights include access to timely repairs and maintenance. A landlord will often include a timeframe for completing repairs. The lease may provide additional details about timing.
The right to privacy and notice for landlord visits
This is one of the most common landlord-tenant issues. Thankfully, renters’ rights are quite clear on the subject.
A landlord or property owner might own your apartment, but they can’t just barge in whenever they want. Landlords can only enter under certain circumstances. These include making or assessing repairs and showing rental units to insurance or mortgage professionals and prospective renters.
Landlords don’t need permission to enter during emergency situations like a fire or natural disaster. They can also come in if they think a tenant abandoned an apartment.
Most states require a landlord to give advance notice before entering an apartment, usually 24-48 hours. Rental agreements may provide more details.
Tenants have the right to request another date or time for a landlord’s visit. But they can’t deny them access if they have a valid reason to enter.
The right to fair credit reporting
The Fair Credit Reporting Act of 1970 gives renters the right to know what’s in their credit reports. If a property manager or landlord rejects your application, they have to disclose where they got the information. They also have to tell you how to contact the issuer. You just need to request this information from your landlord in writing.
This protects tenant rights because landlords have to provide evidence of bad credit. They can’t just deny your application for no reason. It can also catch clerical errors and alert you to possible identity theft.
Rights regarding notice of evictions
Evictions are one of the most difficult landlord-tenant issues. Landlords can legally evict a tenant for several reasons. These include nonpayment of rent, violating the terms of the rental agreement, significant property damage and failing to move out after a lease ends. The eviction process and eviction laws vary from state to state.
A landlord must follow the law in their state. Renters have the right to receive an eviction notice that details the reason for eviction. It must also provide a time frame for the eviction process. Residents should respond in writing and offer a solution that resolves the problem, if possible. (Eviction resources are available.) Once an eviction goes to court, the process is more difficult to stop.
If landlord-tenant communication breaks down and the issue isn’t resolved, the case goes to eviction court. If bad landlords try to evict tenants without an eviction court order, renters can get damages. Contact a lawyer or law firm immediately.
An eviction can damage your credit and make it hard to find a home in a safe location. Hiring a lawyer can help.
“Nationwide, only 10 percent of tenants are able to secure representation in eviction cases, compared to 90 percent of landlords,” Emily Benfer of the Princeton University Eviction Lab explains. “Where tenants are not represented, the vast majority lose their case.”
The right to recover a security deposit
Renters also have the right to have their security deposit returned at the end of a lease. Many rental agreements require security deposits to fix damage caused by residents or a pet. Security deposits are also used to cover incomplete rent payments.
Landlords can use a security deposit to fix the damaged rental unit or to pay off unpaid rent. But they need to provide the renter with an itemized list of expenses for which the landlord used the security deposit. They also need to return the unused portion of the security deposit to the tenant.
A renter should know local laws since some states limit how you can use security deposits and how large they are. Certain security deposits (like pet security deposits) aren’t refundable. Check your lease for the details.
The right to quiet enjoyment
Residents have the right to quiet enjoyment, called “Covenant of Quiet Enjoyment” in a lease. It guarantees residents the right to enjoy their rental property without “substantial interference” from a landlord.
If a landlord starts hammering nails in the middle of the night or fails to enforce quiet hours or no-smoking rules, they could be in violation. Refusing to repair a rental unit until it becomes uninhabitable, revving engines or throwing loud parties would be a violation, too.
A renter who can prove their landlord acted in bad faith could earn monetary damages or a full or partial rent refund. A lawyer who specializes in landlord-tenant issues will be an important ally.
Protect your rights
Now that you’ve reviewed your rights, you understand the protections provided by the law and your lease. If you’re a victim of discrimination or another legal issue, there’s more work ahead.
You may need to report a renters’ rights violation or file a landlord-tenant dispute. You might need to file a claim, challenge an eviction or take legal action.
Read the rental agreement
If you’re not sure if your landlord has violated your tenants’ rights, re-read your lease carefully. It can provide evidence to support your case or clarify a legal issue.
In a perfect world, you received a copy of your lease when you signed it. Some states must provide a copy of your lease agreement after you move in and after every annual renewal.
Otherwise, you can request a copy of your rental agreement from your landlord or management company in writing. That’s a good habit to get into for all landlord-tenant communications.
Document everything
Get everything in writing when documenting a legal issue. You need clear evidence and an organized system for keeping track of all the details.
“Documentation is important, whether you’re talking to a lawyer, going through the court system or going through a housing discrimination case,” says Kelly Gorz, Associate Director of High Plains Fair Housing Center in Grand Forks, North Dakota.
“Keep track of any kind of communication you have with your landlord — any emails, texts, receipts. Keep a notebook. If you talk to them in person, write down the date, what you asked for and what they said. Take pictures at move-in and walk-out. Take videos. Definitely don’t pay in cash. Make sure you have some kind of record of payment, whether that’s a check or certified mail.”
Study tenant rights in your state
Legal protections for renters vary widely by state and territory. They can even vary from city to city, so research the laws in your location thoroughly.
“Contact local fair housing offices and your city planning and development offices, too,” suggests Gorz. “They are very connected to their local community resources.”
Renters in HUD housing can call 1-800-MULTI-70 (1-800-685-8470). Assistance is available in English and Spanish. HUD also details tenant rights organizations and services by state and territory.
Some state attorney general websites also have information for renters. Enter your state to learn if yours is one of them.
Report discrimination to a partner agency
Reporting discrimination can feel overwhelming. Filing a claim with a community organization that specializes in FHA issues can make the process feel more manageable.
A renter can usually work directly with an organization in its own state. Staff members serve as advocates for renters who are filing an FHA claim, facing an eviction notice or dealing with another legal issue. Some can provide a lawyer or other legal services, while others provide free education and outreach.
Report FHA violations to HUD on the phone
Renters can also report housing discrimination complaints directly to HUD by calling 1-800-669-9777. The TTY is 1-800-927-9275. It’s always free to call.
Provide your name and address, as well as the name and address of the person who discriminated against you. Include the date the violation occurred, the address of the rental property and a brief description of the incident.
If HUD finds evidence of discrimination against a renter and the case goes to court, HUD will provide a lawyer for free. A renter can also retain their own attorney.
Report discrimination to HUD in writing
Tenants can also provide these details in writing. File an online complaint in Spanish or English on the HUD website.
Or, download this form and mail or email it to the closest regional office. The form is also available in Arabic, Spanish, Chinese, Korean, Russian, Somali, Cambodian and Vietnamese.
Retain an attorney
If you’ve been a victim of discrimination, you’ll need a lawyer that specializes in discrimination cases. If you’re challenging an eviction or you’re in the middle of a landlord-tenant dispute, select an experienced landlord-tenant attorney.
Free legal help is also available. Search by state to find a pro bono attorney or law firm in your area.
Challenge unmade repairs
If a landlord doesn’t make necessary repairs or the apartment is uninhabitable, renters have options. First, submit a request for repairs in writing and document any response.
Next, check your city and state’s maintenance laws. Information is often available at the local housing or building authority office. The health departments or fire stations might also provide help.
If the problem violates building or health codes or the apartment isn’t safe to live in, contact local authorities. Inspectors may order the landlord to fix the problem.
Knowledge is power
Every renter should know and understand their rights. That’s the first step to preserving them. And if your landlord violates your rights are violated, take the necessary steps to resolve the issues so you can enjoy a safe and happy home.
In February 2020, Tenisha Tate-Austin and Paul Austin decided to erase all traces of their existence in the Northern California home the Black couple had created for themselves and their children.
They “whitewashed” their home by removing their family photographs and African art displayed around the house. They had a white friend place some of her own family photographs around the home and greet the appraiser as if she were the homeowner.
The couple wanted to see if they’d get a better home appraisal than the one they had received three weeks earlier.
The experiment worked. This time, the appraisal (by a different appraiser from the same appraisal management firm) was almost 50% higher. In three weeks, the value of their Marin City home, 11 miles north of San Francisco, had gone from $995,000 to $1,482,500.
In March, the Austins settled a fair housing lawsuit alleging race discrimination against the licensed real estate appraiser; they’d reached a settlement in October with the appraisal management company.
Sixty years after Martin Luther King Jr. delivered his most iconic speech calling for civil and economic rights and an end to racism, one of the biggest roadblocks to building wealth for Black Americans is still in place: The housing gap has widened from the time it was legal to discriminate based on race.
In 1960, eight years before the Fair Housing Act, which prohibits property owners, financial institutions and landlords from discriminating based on race, the homeownership gap between white (65%) and Black (38%) stood at 27 percentage points. In 2021, or 60 years later, that gap had grown: 73% of white households owned a home compared with Black homeownership at 44%, a difference of 29 percentage points, according to the Urban Institute.
“We missed out on a better interest rate because of the unfair appraisal we received,” Tenisha Tate-Austin said in statement through her lawyer. “Having to erase our identity to get a better appraisal was a wrenching experience. We know of other Black families who either couldn’t get a loan because of a discriminatory appraisal and therefore either lost the opportunity to buy or sell a home, or they had to sell their home because they had an unaffordable loan.”
Explore the series:MLK’s ‘I have a dream’ speech looms large 60 years later
Housing gap:‘We are a broken people’: The importance of Black homeownership and why the wealth gap is widening
King fought racist housing practices in ChicagoThough King knew housing was an important topic when he made his 1963 speech (it included the line “We cannot be satisfied as long as the Negro’s basic mobility is from a smaller ghetto to a larger one,” his focus was ending segregation in the South, said Beryl Satter, professor of history at Rutgers University in New Jersey and author of “Family Properties: Race, Real Estate, and the Exploitation of Black Urban America.”“The speech was about jobs and ending segregation of drinking fountains and restaurants, buses, trains, movie theaters and swimming pools to help pass the Civil Rights Act,” she said. Once that was accomplished, King trained his sights on housing in the North, particularly Chicago, where he focused on enforcing a pre-existing law on open housing, Satter said.The open housing laws in Chicago already forbade real estate agents from steering Black families into Black neighborhoods and dictated that housing should be made available regardless of race.“But like many such open housing laws, it was not enforced,” Satter said.In January 1966, King moved with his family into an apartment in North Lawndale on the West Side of Chicago to bring attention to the poor living conditions of Black families living without water, electricity and heat. He marched with Black and white supporters into segregated white neighborhoods to call for open housing.“And there he was met with the most violence he had ever been met with in any of his civil rights struggles. He said that the violence in Chicago made the whites in Mississippi look good,” Satter said. “He was hit with a stone while marching in Chicago, and he kept going.”Fair Housing Act became law after King’s deathFrom 1966 to 1967, Congress regularly considered a fair-housing bill, but it was ultimately defeated.“It was the first time that a Civil Rights Act had been defeated since the ’50s,” Satter said. “There was massive white resistance to any law or direct action that threatened racial segregation and housing. It was something that whites in the North fought to the death to keep.”After King was assassinated in 1968, President Lyndon Johnson pushed through the national Fair Housing Act as a memorial to King, whose name had become closely associated with the fair housing legislation.The undervaluation of homes in Black neighborhoods, decadeslong housing segregation, a systemic denial of loans or insurance in predominantly minority areas, a persistent income gap, and a historically limited ability of Black parents to leave their families an inheritance have contributed to the nation’s financial disparity, experts say.
During the housing boom of the early 2000s, Black Americans ages 45 to 75 disproportionately held subprime mortgages, loans offered at higher interest rates to borrowers characterized as having tarnished credit histories. Many of these mortgage holders lost their homes and have been unable to return to homeownership.
These trends will affect retirement prospects for Black Americans and their ability to pass down wealth to the next generation, making it not just one generation’s problems but an intergeneration disparity, experts say.
White wealth surpasses Black wealth
In 2016, white families posted the highest median family wealth at $171,000. Black families, in contrast, had a median family wealth of $17,600, according to the Federal Reserve. Homeownership has long been considered the best path to build long-term wealth, so increasing the rate of homeownership can play an important role in closing the wealth gap, experts say.
Over the past decade, the median-priced home in the United States gained $190,000 in value, making the typical homeowner 40 times wealthier than if they had remained a renter, according to a report released in April by the National Association of Realtors.
Some signs of hope emerged during the coronavirus pandemic, when mortgage rates were at historic lows.
During that time, Black homeownership rates increased by 2 percentage points, surpassing the white homeownership rate, which increased just 1 percentage point.
The historically low mortgage rates enabled high-earning, highly educated Black households to boost homeownership rates. Most high-income white households already were homeowners, which explains the smaller magnitude of growth, according to the analysis.
Black homeownership rate saw small improvements
From 2019 to 2021, the homeownership rate for Black households went from 42% to 44%; for white households it went from 72% to 73%.
After experiencing a continuous decline since the Great Recession, the Black homeownership rate finally made gains between 2019 and 2021. The reason was pent-up demand, said Jung Choi, a researcher at the Urban Institute.
“This suggests that affordability really matters,” Choi said. “Now, with the surge in interest rates, we are already seeing a sharp decline in Black homebuyers as well as younger homebuyers.”
Satter said King’s final book, 1967’s “Where Do We Go From Here: Chaos or Community?” cautions against complacency simply because there are laws on the books.
“He really understood that having a law in books was the beginning, not the end. Today we have the Fair Housing Act of 1968, and there are ongoing local, state and national laws that are supposed to stop housing discrimination,” Satter said. “I think King would have predicted that they would not be effective if there wasn’t a larger public will to enforce it and a strong political organization pushing to enforce it.”
Swapna Venugopal Ramaswamy is a housing and economy correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our Daily Money newsletter here.
The Jefferson Avenue commercial district in Buffalo, New York, is anchored by a supermarket.
There are dozens of other businesses and services along the 12-block corridor — a couple of bank branches, a library, a coffee shop, gas stations, a small plaza with a dollar store and a primary care clinic and a business incubator for entrepreneurs of color.
But Tops Friendly Markets, the only grocery store on Buffalo’s vast East Side, is the center of activity. More than just a place to buy food, pick up medications and use an ATM, the store is a communal gathering space in a predominantly Black neighborhood that, for generations, has been segregated, isolated and disenfranchised from the wealthier — and whiter — parts of the city.
Which explains how it came to be the site of a mass shooting on a spring day in May of last year. On that Saturday, a gunman, who lived 200 miles away in another part of the state, drove to Jefferson Avenue and went into Tops, and in just a few minutes killed 10 people, injured three and inflicted mass trauma across the community.
It is a scenario that has sadly, and repeatedly, played out in other parts of the country that have experienced mass shootings. But this one came with a twist: The gunman’s intention was to kill as many Black people as possible.
To achieve that, he specifically targeted a ZIP code with one of the highest percentages of Black residents in New York state. All 10 who died that day were Black.
“The mere fact that someone can research, ‘Where will the greatest number of Black people be … on a Saturday morning,’ that’s not by chance,” said Franchelle Parker, a community organizer and executive director of Open Buffalo, a nonprofit focused on racial, economic and ecological justice. “That’s not a mistake. It’s a community that’s been deeply segregated for decades.”
The day of the shooting, Parker, who grew up in nearby Niagara Falls, was driving to Tops, where she planned to buy a donut and an unsweetened iced tea before heading into the Open Buffalo office, which is located a block away from Tops. The mother of two had intended to complete the mundane task of cleaning up her desk — “old coffee cups and stuff” — after a busy week.
She saw the news on Twitter and didn’t know if she should keep driving to Jefferson Avenue or turn around and go back home. She eventually picked the latter.
When she showed up the next day, there were thousands of people grieving in the streets. “The only way that I could explain my feeling, it was almost like watching an old war movie when a bomb had gone off and someone’s in, like, shell shock. That’s how it felt,” said Parker, vividly recounting the community’s collective trauma in a meeting room tucked inside of Open Buffalo’s second-story office on Jefferson Avenue.
Almost immediately following the May 14, 2022, massacre, which was the second-deadliest mass shooting in the United States last year, conversations locally and nationally turned to the harsh realities of the East Side and how long-standing factors that affect the daily life of residents — racism, poverty and inequity — made the community an ideal target for a white supremacist.
Now, more than a year after the tragedy, there is growing concern that not enough is being done fast enough to begin to dismantle those factors. And amid those conversations, there are mounting calls for the banking industry — whose historical policies and practices helped cement the racial segregation and disinvestment that ultimately shaped the East Side — to leverage its collective power and influence to band together in an effort to create systemic change.
The ideas about how banks should support the East Side and better embed themselves in the neighborhood vary by people and organizations. But the basic argument is the same: Banks, in their role as financiers and because of the industry’s history of lending discrimination, are obligated to bring forth economic prosperity in disinvested communities like the East Side.
I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.
Chiwuike Owunwanne, corporate responsibility officer at KeyBank
“Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that,” said The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity, a four-year-old enterprise focused on racial, geographic and economic health disparities. “But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.”
To be sure, banks’ ability to reverse the course of the community isn’t guaranteed — and there is no formula to determine how much accountability they should hold to fix deeply entrenched problems like racism. Several Buffalo-area bankers said that while the Tops shooting heightened the urgency to help the East Side, the industry itself cannot be the sole driver of change.
“There are a lot of institutions … that can certainly play a part in reversing the challenges that we see today,” said Chiwuike “Chi-Chi” Owunwanne, a corporate responsibility officer at KeyBank, the second-largest bank by deposits in Buffalo. “I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.”
A long history of segregation
How the East Side — and the Tops store on Jefferson Avenue — became the destination for a racially motivated mass murderer is a story about racism, segregation and disinvestment.
Even as it bears the nickname “the city of good neighbors,” Buffalo has long been one of the most racially segregated cities in the United States. Of the 114,965 residents who live on the East Side, 59% are Black, according to data from the 2021 U.S. Census American Community Survey. The percentage is even higher in the 14208 ZIP code, where the Tops store is located. In that ZIP code, among 11,029 total residents, nearly 76% are Black, the census data shows.
The city’s path toward racial segregation started in the early 20th century when a small number of job-seeking Black Americans migrated north to Buffalo, a former steel and auto manufacturing hub at the far northwestern end of New York state. Initially, they moved into the same neighborhoods as many of the city’s poorer immigrants and lived just east of what is today the city’s downtown district. As the number of Blacks arriving in Buffalo swelled in the 1940s, they were increasingly confronted with various housing challenges, including racist zoning laws and restrictive deed covenants that kept them from buying homes in more affluent white areas.
Black Buffalonians also faced housing discrimination in the form of redlining, the practice of restricting the flow of capital into minority communities. In 1933, as the Great Depression roiled the economy, a temporary federal agency known as the Home Owners’ Loan Corporation used government bonds to buy out and refinance mortgages of properties that were facing or already in foreclosure. The point was to try to stabilize the nation’s real estate market.
As part of its program, HOLC created maps of American cities, including Buffalo, that used a color coding scheme — green, blue, yellow and red — to convey the perceived riskiness of making loans in certain neighborhoods. Green was considered minimally risky; other areas that were largely populated by immigrant, Black or Latino residents were labeled red and thus determined to be “hazardous.”
“The goal was to free up mortgage capital by going to cities and giving banks a way to unload mortgages, so they could turn around and make more mortgage loans,” said Jason Richardson, senior director of research at the National Community Reinvestment Coalition, an association of more than 750 community-based organizations that advocates for fair lending. “It was kind of a radical concept and it has evolved over the decades into our modern mortgage finance system.”
The Federal Housing Administration, which was established as a permanent agency in 1934, used similar methods to map urban areas and labeled neighborhoods from “A” to “D,” with “A” considered to be the most financially stable and “D” considered the least. Neighborhoods that were largely Black, even relatively stable ones, were put in the “D” category.
The result was that banks, which wanted to be able to sell mortgage loans to the FHA, were largely dissuaded from making loans in “risky” areas. And Buffalo’s East Side, where the majority of Blacks were settling, was deemed risky. Unable to get loans, Blacks couldn’t buy homes, start businesses or build equity. At the same time, large industrial factories on the East Side were closing or moving away, limiting job opportunities and contributing to rising poverty levels.
“Today what we’re left with is the residue of this process where we’ve enshrined … a pattern of economic segregation that favors neighborhoods that had fewer Black people in them and generally ignores neighborhoods that had African Americans living in them,” Richardson said.
Case in point: Research by the National Community Reinvestment Coalition shows that three-quarters of neighborhoods that were once redlined are low- to moderate-income neighborhoods today, and two-thirds of them are majority minority communities.
Adding to the division between Blacks and whites in Buffalo was the construction of a highway called the Kensington Expressway. Built during the 1960s, the below-grade, limited-access highway proved to be a speedy way for suburban workers to get to their downtown jobs. But its construction cut off the already-segregated East Side even more from other parts of the city, displacing residents, devaluing houses and destroying neighborhoods and small businesses.
As a result of those factors and more, many Black residents have become “trapped” on the East Side, according to Dr. Henry Louis Taylor Jr., a professor of urban and regional planning at the University at Buffalo. In 1987, Taylor founded the UB Center for Urban Studies, a research, neighborhood planning and community development institute that works on eliminating inequality in cities and metropolitan regions. In September 2021, eight months before the Tops shooting, the Center for Urban Studies published a report that compared the state of Black Buffalo in 1990 to present-day conditions. The conclusion: Nothing had changed for Blacks over 31 years.
As of 2019, the Black unemployment rate was 11%, the average household income was $42,000 and about 35% of Blacks had incomes that fell below the poverty line, the report said. It also noted that just 32% of Blacks own their homes and that most Blacks in the area live on the East Side.
“Those figures remain virtually unchanged while the actual, physical conditions that existed inside of the community worsened,” Taylor told American Banker in an interview in his sun-filled office at the center, located on the University at Buffalo’s city campus. “When we looked upstream to see what was causing it, it was clear: It was systemic, structural racism.”
Banks’ moral obligations
As the East Side struggled over the decades with rampant poverty, dilapidated housing, vacant lots and disintegrating infrastructure, banks kept a physical presence in the community, albeit a shrinking one. In mid-2000, there were at least 20 bank branches scattered across the East Side, but by mid-2022, the number had fallen to around 14, according to the Federal Deposit Insurance Corp.’s deposit market share data. The 14 include four new branches that have opened since early 2019 — Northwest Bank, KeyBank, Evans Bank and BankOnBuffalo.
The first two branches, operated by Northwest in Columbus, Ohio, and KeyBank, the banking subsidiary of KeyCorp in Cleveland, were requirements of community benefits agreements negotiated between each bank and the National Community Reinvestment Coalition. In both cases, Northwest and KeyBank agreed to open an office in an underserved community.
Evans Bank opened its first East Side branch in the fall of 2021. The office is located in the basement of an $84 million affordable senior housing building that was financed by Evans, a $2.1 billion-asset community bank headquartered south of Buffalo in Angola, New York.
Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that. But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.
The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity
On the community and economic development front, banks have had varying levels of participation. Buffalo-based M&T Bank, which holds a whopping 64% of all deposits in the Buffalo market and is one of the largest private employers in the region, has made consistent investments in the East Side by supporting Westminster Community Charter School, a kindergarten through eighth-grade school, and the Buffalo Promise Neighborhood, a nonprofit organization focused on improving access to education in the city’s 14215 ZIP code.
Currently, Buffalo Promise Neighborhood operates four schools. In addition to Westminster, it runs Highgate Heights Elementary, also K-8, as well as two academies that serve children ages six weeks through pre-kindergarten. Twelve M&T employees are dedicated to the program, according to the Buffalo Promise Neighborhood website. The bank has invested $31.5 million into the program since its 2010 launch, a spokesperson said.
Other banks are making contributions in other ways. In addition to the Jefferson Avenue branch and as part of its community benefits plan, Northwest Bank, a $14.2 billion-asset bank, supports a financial education center through a partnership with Belmont Housing Resources of Western New York. Meanwhile, the $198 billion-asset KeyBank gave $30 million for bridge and construction financing for Northland Workforce Training Center, a $100 million redevelopment project at a former manufacturing complex on the East Side that was partially funded by the state.
BankOnBuffalo’s East Side branch is located inside the center, which offers KeyBank training in advanced manufacturing and clean energy technology careers. A subsidiary of $5.6 billion-asset CNB Financial in Clearfield, Pennsylvania, BankOnBuffalo’s office opened a month after the shooting. The timing was coincidental, but important, said Michael Noah, president of BankOnBuffalo.
“I think it just cemented the point that this is a place we need to be, to be able to be part of these communities and this community specifically, and be able to build this community up,” Noah said.
In terms of public-private collaboration, some banks have been involved in a deeper way. In 2019, New York state, which had already been pouring $1 billion into Buffalo to help revitalize the economy, announced a $65 million economic development fund for the East Side. The initiative is focused on stabilizing neighborhoods, increasing homeownership, redeveloping commercial corridors including Jefferson Avenue, improving historical assets, expanding workforce training and development and supporting small businesses and entrepreneurship.
In conjunction with the funding, a public-private partnership called East Side Avenues was created to provide capital and organizational support to the projects happening along four East Side commercial corridors. Six banks — Charlotte, North Carolina-based Bank of America, the second-largest bank in the nation with $2.5 trillion of assets; M&T, which has $203 billion of assets; KeyBank; Warsaw, New York-based Five Star Bank, which has about $6 billion of assets; Northwest and Evans — are among the 14 private and philanthropic organizations that pledged a combined $8.4 million to pay for five years’ worth of operational support, governance and finance, fundraising and technical assistance to support the nonprofits doing the work.
Laura Quebral, director of the University at Buffalo Regional Institute, which is managing East Side Avenues, said the banks were the first corporations to step up to the request for help, and since then have provided loans and other products and education to keep the program moving.
Their participation “is a signal to the community that banks cared and were invested and were willing to collaborate around something,” Quebral said. “Being at the table was so meaningful.”
Richard Hamister is Northwest’s New York regional president and former co-chair of East Side Avenues. Hamister, who is based in Buffalo, said banks are a “community asset” that have a responsibility to lift up all communities, including those where conditions have arisen that allow it to be a target of racism like the East Side.
“We operate under federal charters, so we have an obligation to the community to not only provide products and services they need but also support when you go through a tragedy like that,” Hamister said. “We also have a moral obligation to try to help when things are broken … and to do what we can. We can’t fix everything, but we’ve got to fix our piece and try to help where we can.”
In the wake of a tragedy
After the massacre, there was a flurry of activity within banks and other organizations, local and out-of-town, to respond to the immediate needs of East Side residents. With the community’s only supermarket closed indefinitely, much of the response centered around food collection and distribution. Three of M&T’s five East Side branches, including the Jefferson Avenue branch across the street from Tops, became food distribution sites for weeks after the shooting. On two consecutive Fridays, Northwest provided around 200 free lunches to the community, using a neighborhood caterer who is also the bank’s customer. And BankOnBuffalo collected employee donations that amounted to more than 20 boxes of toiletries and other items that were distributed to a nonprofit.
At the same time, M&T, KeyBank and other banks began financial donations to organizations that could support the immediate needs of the community. KeyBank provided a van that delivered food and took people to nearby grocery stores. Providence, Rhode Island-based Citizens Financial Group, whose ATM inside Tops was inaccessible during the store’s temporary closure, installed a fee-free ATM near a community center located about a half-mile north of Tops, and later put a permanent ATM inside the center that remains there today. And M&T rolled out a short-term loan program to provide capital to East Side small-business owners.
One of the funds that benefited from banks’ support was the Buffalo Together Community Response Fund, which has raised $6.2 million to address the long-term needs of the East Side.
Bank of America and Evans Bank each donated $100,000 to the fund, whose list of major sponsors includes four other banks — JPMorgan Chase, Citigroup, M&T and KeyBank. Thomas Beauford Jr., a former banker who is co-chair of the response fund, said banks, by and large, directed their resources into organizations where the dollars would have an immediate impact.
“Banks said, ‘Hey, you know … it doesn’t make sense for us to try to build something right now. … We will fund you in the work you’re doing,'” said Beauford, who has been president and CEO of the Buffalo Urban League since the fall of 2020. “I would say banks showed up in a big way.”
Fourteen months later, banks say they are committed to playing a positive role on the East Side. For the second year, KeyBank is sponsoring a farmers’ market on the East Side, an attempt to help fill the food desert in the community. Last fall, BankOnBuffalo launched a mobile “bank on wheels” truck that’s stationed on the East Side every Wednesday. The 34-foot-long truck, which is staffed by two people and includes an ATM and a printer to make debit cards, was in the works before the shooting, and will eventually make four stops per week around the Buffalo area.
Evans has partnered with the city of Buffalo to construct seven market-rate single family homes on vacant lots on the East Side. The relationship with the city is an example of how banks can pair up with other entities to create something meaningful and lasting, more than they might be able to do on their own, said Evans President and CEO David Nasca.
The bank has “picked areas” where it can use its resources to make a difference, Nasca said.
“I don’t think the root causes can be ameliorated” by banks alone, he said. “We can’t just grant money. It has to be within our construct of a financial institution that invests and supports the public-private partnership. … All the oars [need to be] pulling together or this doesn’t work.”
‘Little or no engagement with minorities’
All of these efforts are, of course, welcomed by the community, but there is still criticism that banks haven’t done enough to make up for their past contributions to segregating the city. And perhaps more importantly, some of that criticism centers on banks failing to do their most basic function in society — provide credit.
In 2021, the New York State Department of Financial Services issued a report about redlining in Buffalo. The regulator looked at banks and nonbank lenders and found that loans made to minorities in the Buffalo metro area made up 9.74% of total loans in Buffalo. Overall, Black residents comprise about 33% of Buffalo’s total population of more than 276,000, census data shows.
The department said its investigation showed the lower percentage was not due to “excessive denials of loan applications based on race or ethnicity,” but rather that “these companies had little or no engagement with minorities and generally made scant effort to do so.”
“The unsurprising result of this has been that few minority customers or individuals seeking homes in majority-minority neighborhoods have made loan applications … in the first instance.”
Furthermore, accusations of redlining persist today, even though the practice of discriminating in housing based on race was outlawed by the Fair Housing Act of 1968.
In 2014, Evans was accused of redlining by the New York State Attorney General, which said the community bank was specifically avoiding making mortgage loans on the East Side. The bank, which at the time had $874 million of assets, agreed to pay $825,000 to settle the case, but Nasca maintains that the charges were unfounded. He points to the fact that the bank never had a fair lending or fair housing violation, no specific incidents were ever claimed and that the bank’s Community Reinvestment Act exam never found evidence of discriminatory or illegal credit practices.
The bank has a greater presence on the East Side today, but that’s because it has grown in size, not because it is trying to make up for previous accusations of redlining, he said.
“Ten years ago, our involvement [on the East Side] certainly wasn’t what you’re seeing today,” Nasca said. “We were looking to participate more, but we were participating within our means and our reach. As we have grown, we have built more resources to be able to do more.”
Shortly after accusations were made against Evans, Five Star Bank, the banking arm of Financial Institutions in Warsaw, New York, was also accused of redlining by the state Attorney General. Five Star, which has been growing its presence in the Buffalo market for several years, wound up settling the charges for $900,000 and agreeing to open two branches in the city of Rochester.
KeyBank is currently being accused of redlining by the National Community Reinvestment Coalition. In a 2022 report, the group said that KeyBank is engaging in systemic redlining by making very few home purchase loans in certain neighborhoods where the majority of residents are Black. Buffalo is one of several cities where the bank’s mortgage lending “effectively wall[ed] out Black neighborhoods,” especially parts of the East Side, the report said.
KeyBank denied the allegations. In March, the coalition asked regulators to investigate the bank’s mortgage lending practices.
Beyond providing more credit, some community members believe that banks should be playing a larger role in addressing other needs on the East Side. And the list of needs runs the gamut from more grocery stores to safe, affordable housing to infrastructure improvements such as street and sidewalk repairs.
Alexander Wright is founder of the African Heritage Food Co-op, an initiative launched in 2016 to address the dearth of grocery store options on the East Side, where he grew up. Wright said that while banks’ philanthropic efforts are important, banks in general “need to be in a place of remediation” to fix underlying issues that the industry, as a whole, helped create. (After publication of this story, Wright left his job as CEO of the African Heritage Food Co-Op.)
Aside from charitable donations, banks should be finding more ways to work directly with East Side business owners and entrepreneurs, helping them with capital-building support along the way, Wright said. One place to start would be technical assistance by way of bank volunteers.
“Banks are always looking to volunteer. ‘Hey, want to come out and paint a fence? Want to come out and do a garden?'” Wright said. “No. Come out here and help Keshia with bookkeeping. Come out here and do QuickBooks classes for folks. Bring out tax experts. Because these are things that befuddle a lot of small businesses. Who is your marketing person? Bring that person out here. Because those are the things that are going to build the business to self-sufficiency.
“Anything short of the capacity-building … that will allow folks to rise to the occasion and be self-sufficient I think is almost a waste,” Wright added. “We don’t need them to lead the plan. What we need them to do is be in the community and [be] hearing the plan and supporting it.”
Parker, of Open Buffalo, has similar thoughts about the role that banks should play. One day, soon after the massacre, an ATM appeared down the street from Tops, next to the library that sits across the street from Parker’s office. Soon after the ATM was installed, Parker began fielding questions from area residents who were skeptical of the machine and wanted to know if it was legitimate. But Parker didn’t have any information to share with them. “There was no outreach. There was no community engagement. So I’m like, ‘Let me investigate,'” she said. “I think that’s a symptom of how investment is done in Black communities, even though it may be well-intentioned.”
As it turns out, the temporary ATM belonged to JPMorgan Chase. The megabank has had a commercial banking presence in Buffalo for years, but it didn’t operate a retail branch in the region until last year. Today it has four branches in operation and plans to open another two by the end of the year, a spokesperson said.
After the Tops shooting, the governor’s office reached out to Chase asking if the bank could help in some way, the spokesperson said in response to the skepticism. The spokesperson said that while the Chase retail brand is new to the Buffalo region, the company has been active in the market for decades by way of commercial banking, private banking, credit card lending, home lending and other businesses.
In addition to the ATM, the bank provided funding to local organizations including FeedMore Western New York, which distributes food throughout the region.
“We are committed to continuing our support for Buffalo and helping the community increase access to opportunities that build wealth and economic empowerment,” the spokesperson said in an email.
In the year since the massacre, there has been some progress by banks in terms of their interest in listening to the East Side community and learning about its needs, said Nicholas. But he hasn’t felt an air of urgency from the banking community to tackle the issues right now.
“I do experience banks being a little more open to figuring out what their role is, but it’s slow. It’s slow,” said Nicholas. The senior pastor of the Lincoln Memorial United Methodist Church, located about a mile north from Tops, Nicholas is part of a 13-member local advisory committee for the New York arm of Local Initiatives Support Coalition, or LISC. The group is focused on mobilizing resources, including banks, to address affordable housing in Western New York, specifically in the inner city, as well as training minority developers and connecting them to potential investors, Nicholas said.
Of the 13 members, seven are from banks — one each from M&T, Bank of America, BankOnBuffalo, Evans and KeyBank, and two members from Citizens Financial Group. One of the priorities of LISC NY is health equity, and the fact that banks are becoming more engaged in looking at health disparities is promising, Nicholas said. Still, they have more work to do, he said.
“I need them to think more on how to strengthen and build the economy on the East Side and provide leadership around that, not only to provide charitable things, but using sound business and banking and community development principles to say, ‘OK, if we’re going to invest in this community, these are the types of things that need to happen in this community,’ and then encourage their partners and other people they work with … to come fully in on the East Side.”
Some bankers agree with the community activists.
“Putting a branch in is great. Having a bank on wheels is great,” said Noah of BankOnBuffalo. “But if you’re not embedded in the community, listening to the community and trying to improve it, you’re not creating that wealth and creating a better lifestyle for everyone.”
What could make a substantial difference in terms of banks’ impact on the community is a combination of collaboration and leadership, said Taylor. He supports the idea of banks leading the charge on the creation of a comprehensive redevelopment and reinvestment plan for the East Side, and then investing accordingly and collaboratively through their charitable foundations.
“All of them have these foundations,” Taylor said. “You can either spend that money in a strategic and intentional way designed to develop a community for the existing population, or you can spend that money alone in piecemeal, siloed, sectorial fashion that will look good on an annual report, but won’t generate transformational and generational changes inside a community.”
Banks might be incentivized to work together because it could mean two things for them, according to Taylor: First, they’d have an opportunity to spend money in a way that would have maximum impact on the East Side, and second, if done right, the city and the banks could become a model of the way to create high levels of diversity, equity and inclusion in an urban area.
“If you prove how to do that, all that does is open up other markets of consumption all over the country because people want to figure out how to do that same thing,” Taylor said.
Some of that is already happening, at least on a bank-by-bank case, said KeyBank’s Owunwanne. Through the KeyBank Foundation, the company is able to leverage different relationships that connect nonprofits to other entities and corporations that can provide help.
“I see this as an opportunity for us to make not just incremental changes, but monumental changes … as part of a larger group,” Owunwanne said “Again, I say that not to absolve the bank of any responsibility, but just as a larger group.”
Downstairs from Parker’s office, Golden Cup Coffee, a roastery and cafe run by a husband and wife team, and some other Jefferson Avenue businesses are trying to build up a business association for existing and potential Jefferson-area businesses. Parker imagined what the group could accomplish if one of the banks could provide someone on a part-time basis to facilitate conversations, provide administrative support and coordinate marketing efforts.
“In the grand scheme of things, when we’re talking about a multimillion dollar [bank], a part-time employee specifically dedicated to relationship-building and building out coalitions, it sounds like a small thing,” Parker said. “But that’s transformational.”
City National Bank has agreed to pay $31 million to settle a U.S. Justice Department lawsuit alleging racial bias in its home mortgage lending in Los Angeles County.
The government’s complaint, filed Thursday in Los Angeles, accused the bank of violating federal housing and banking discrimination laws by avoiding loans to buyers of homes in neighborhoods that are majority Black or Latino.
City National Bank is the largest bank headquartered in L.A., but just one of the 11 branches it has opened in the county over the last 20 years is in a predominantly Black or Latino neighborhood. The county’s population of nearly 10 million is 49% Latino and 9% Black.
From 2017 to 2020, City National Bank maintained just three of its 37 branches in majority Black and Latino neighborhoods, the complaint said.
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The bank relied on “relationship managers” to generate home loan applications from existing customers, who were predominantly white, the government alleged, and it failed to act on internal reports showing it risked running afoul of fair lending laws.
Other banks serving L.A. County received more than six times as many loan applications in Black and Latino areas, the government found.
City National Bank denied breaking discrimination laws, but said it agreed to settle the case to avoid prolonged litigation.
Under the proposed settlement, which was filed simultaneously with the complaint and requires court approval, the bank would provide $29.5 million in home loan subsidies to borrowers in Black and Latino areas, including interest-rate cuts and down-payment assistance.
Assistant Atty. Gen. Kristen Clarke and U.S. Atty. Martin Estrada announced the agreement at Second Baptist Church Los Angeles in Historic South Central, one of the city’s oldest Black churches. Nobody from the bank participated in the event.
“Through this agreement, we’re sending a strong message to the financial industry that we will not stand for unlawful barriers when it comes to residential mortgage lending,” Clarke said. “We will not stand for unlawful modern-day redlining.”
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City National Bank released a statement saying it supports the Justice Department’s efforts to ensure equal access to loans regardless of race.
“At City National, we are committed to ensuring that all consumers have an equal opportunity to apply for and obtain credit,” it said.
Founded in Beverly Hills in 1953, City National Bank has deep ties to the entertainment industry. It was acquired in 2015 by the Royal Bank of Canada.
As part of the settlement agreement, City National Bank has agreed to spend $500,000 on advertising targeting residents of Black and Latino neighborhoods and $500,000 on a consumer financial education program to enhance their access to credit.
The bank also said it planned to open a new branch in a majority Black or Latino neighborhood and ensure that at least four loan officers are dedicated to serving those areas.
Atty. Gen. Merrick Garland launched a program in 2021 to step up enforcement of housing discrimination laws. It has yielded $75 million in relief to borrowers in Houston, Memphis, Philadelphia, Newark and Los Angeles.
Housing discrimination continues to be a serious problem plaguing renters, homebuyers, and homeowners throughout America.
There were more than 31,200 fair housing complaints filed in 2021, the most recent year where data was available, according to the National Fair Housing Alliance’s 2022 Fair Housing Trends Report. That was the most complaints filed in at least 25 years. The majority, 82%, involved rentals.
“Housing discrimination is pervasive in housing markets across the country,” says Morgan Williams, general counsel of NFHA. “Discrimination is significantly underreported. It’s hard to get good data.”
In 1968, the federal Fair Housing Act was passed to make the rampant discrimination in the housing market illegal. It initially protected people based on race, color, national origin, and religion. Familial status, disability, and sex, which includes sexual orientation and gender identity, have since been added as protected classes.
This is meant to ensure that everyone is treated equally when renting or buying homes, receiving home loans or insurance, and having their homes appraised. However, people are still being denied housing based on their race or sexual orientation, and pregnant women are being denied mortgages.
The NFHA commissioned a report in 2004 that estimated that there were likely more than 3 million fair housing violations against Black, Hispanic, Asian, and Native Americans in the rental and for-sale housing market. This didn’t include violations against other protected groups or in the mortgage, appraisal, and other facets of the real estate industry. When adding those in, he expects there are more than 4 million victims of housing discrimination a year.
Much of the discrimination goes unreported. Many people don’t realize they are victims or are unaware of how to file a fair housing complaint. Those who do often face an uphill battle in proving that they are victims. And some worry about losing their housing if they complain.
“It is a real problem in the market,” says Williams.
What are the most common fair housing complaints?
The bulk of the fair housing complaints received in 2021 were related to disability, according to the NFHA report. These made up about 54.2% of complaints. It was followed by race, familial status, sex, national origin, color, and religion. The report captured complaints filed with nonprofit fair housing organizations and government agencies, including the Department of Housing and Urban Development.
“There is still a tremendous amount of ignorance, as well as conscious and unconscious bias regarding people who are differently abled,” says Stephen Beard. He is an Oakland, CA, real estate agent with Keller Williams who specializes in working with people with disabilities. “Some landlords and other decision-makers do the minimum they can get away with.”
Some of the issues faced by those in the disabled community include being denied rentals because of the way they are perceived, not receiving reasonable accommodations for ramps, chairlifts, and closer parking spaces, as well as landlords not allowing service support animals. Sometimes light fixtures and countertops are out of reach for those in wheelchairs, or kitchens aren’t wide enough to accommodate a chair.
“There simply is not enough accessible housing stock for people with physical challenges, as well as bias against people with cognitive challenges such as autism or who have mental health issues,” says Beard. Many people “can’t find housing. If they have housing, they sometimes can’t afford to move or make their own homes accessible.”
Securing housing is also often a challenge for members of protected classes. For example, families might report that their landlords illegally prohibit their children from accessing amenities in their complexes. People of color are denied mortgages or charged higher fees for loans compared with white borrowers with similar financial pictures. Transgender renters report being evicted due to their gender identity.
“Housing affects absolutely everything you do,” says Marlene Zarfes, executive director of Westchester Residential Opportunities. The civil rights agency works on fair housing complaints in Westchester County, NY, which is located just north of New York City. “If you don’t have suitable housing, how do you get to your job? How do your kids go to school?”