... REDLINING!
Was just trying to be diplomatic in calling the SECU Board's expansion of "race-based lending" at SECU "regrettable". The financial and ethical impact of the Board's decision is far beyond regrettable.
Hope the Board will read at least the highlighted sections of the following NYT article. There is no debate, nor uncertainty that racially discriminatory "redlining" was practiced in this Country up until at least 1975. There is no debate, nor uncertainty that redlining practices financially harmed many different minority populations - especially Americans who simply happened to have great tans.
There is no debate, nor uncertainty that redlining was endorsed by the federal government. There is no uncertainty, nor debate that redlining was the "industry standard". There is no debate, nor uncertainty that redlining was based on a "tiered system" of "A", "B", "C", "D" - "to profile" risk.
There is no debate, nor uncertainty that redlining was "legal" at the time although morally and ethically unconscionable. There is no uncertainty, nor debate that redlining was concocted based on the "popular pseudoscience of the era" - your modern day credit scoring system. There is no uncertainty, nor debate that SECU never practiced redlining in mortgage lending, despite the "legal, industry standard".
SECU - and the Board members who have led the Credit Union in the past - always answered to a higher standard than "the industry standard": the best interests of the members!
https://www.nytimes.com/2021/08/17/realestate/what-is-redlining.html
What Is Redlining?
The term has come to mean racial discrimination of any kind in housing, but it comes from government maps that outlined areas where Black residents lived and were therefore deemed risky investments.
In recent years, the term “redlining” has become shorthand for many types of historic race-based exclusionary tactics in real estate — from racial steering by real estate agents (directing Black home buyers and renters to certain neighborhoods or buildings and away from others) to racial covenants in many suburbs and developments (barring Black residents from buying homes). All of which contributed to the racial segregation that shaped the way America looks today.
But what was redlining, really?
The origins of the term come from government home-ownership programs that were created as part of the 1930s-era New Deal. The programs offered government-insured mortgages for homeowners — a form of federal aid designed to stave off a massive wave of foreclosures in the wake of the Depression.
As these programs evolved, the government added parameters for appraising and vetting properties and homeowners who would qualify. They used color-coded maps ranking the loan worthiness of neighborhoods in more than 200 cities and towns across the United States.
Neighborhoods were ranked from least risky to most risky — or from “A” through “D.” The federal government deemed “D” areas as places where property values were most likely to go down and the areas were marked in red — a sign that these neighborhoods were not worthy of inclusion in home-ownership and lending programs. Not coincidentally, most of the “D” areas were neighborhoods where Black residents lived.
Though the maps were internal documents that were never made public by the federal government, their ramifications were obvious to Black homeowners who could not get home loans that were backed by government insurance programs. Usage of the term redlining became more common during the Civil Rights movement, especially in the era leading up to the passage of the Fair Housing Act of 1968, which prohibited housing discrimination, and the Home Mortgage Disclosure Act of 1975, which required the release of lending data.
In 1976, the historian Kenneth T. Jackson discovered one of these government maps of St. Louis. “When Jackson discovered this map, it was the smoking gun,” said Matthew Lasner, an associate professor of urban studies and planning at Hunter College. (Mr. Jackson says he discovered the map somewhat by accident while searching for other housing records.)
Mr. Lasner says the neighborhoods redlined by the government varied in all sorts of ways — age of the homes, average home values, proximity to industrial areas — but they typically had one thing in common: Black people lived there. (“Integrated” areas, where Black residents lived alongside other racial groups were also rated as a “D” on these maps).
The government’s racist theory — based on popular pseudoscience of the era — was that the presence of any population of Black residents was a sign of impending property value decline. Pretty soon, Mr. Lasner says, private lenders started using the government’s map lines as well — effectively barring Black home buyers from qualifying for secure mortgages from many mainstream banks.
No, "regrettable" is not exactly the appropriate word for the adoption of "race-based lending"... it shames all of us who are members of SECU.
"... "legal" at the time although morally and ethically unconscionable"
ReplyDeleteThis is the crux of most problems ... they tell themselves they ain't breaking the law but deep down they know what they are doing is wrong (but they do it anyway, because everyone is doing it, sound familiar).
Is Ayers still on the Board? His shelf life at the Utilities Commission just got shorter. Maybe he'll take the hint and pack. Clown, first order.
ReplyDeleteHonest question here. If risk based pricing is such a discriminatory practice, why were you only compelled to speak out so regularly with such passion when it came to SECU? Isn’t it just as discriminatory that it is practiced within the industry as a whole, and if so, why be (relatively) silent for the past several years?
ReplyDeleteHave for decades, you just haven't been paying attention. http://jimblaineoncreditunions.blogspot.com/search?q=risk+based+lending&max-results=20&by-date=true
DeleteGuess you're agreeing it's a discriminatory practice, right? Publicly saying that would be most helpful, instead of hiding behind an anonymouse! Touche' brave one!
Why not speak out regularly and passionately against it when it does not align with SECUs initiative to do the right thing? I appreciate that you posted this comment Mr B, but the contributor obviously doesn't know your history. - Charity
DeleteNot only did he speak out, NCSECU was a shining example. Actions, and the results of those actions, are quite powerful. How about now? Is it still the time excuse? Just give it more time?
DeleteThey are trying to misdirect the issue here and trying to put it on JB instead of where it belongs on SECU for changing their practice to RBL.
DeleteI don't really know where to begin but here goes, I had served on the loan review committee for over 30 years - we no longer exist 2 years. The LRC was disbanned after the arrival of Jim $$$ Hayes. I've been on multiple Advisory Boards and until year before last we were the sounding board for new ideas, new programs, etc and were the eyes and ears of members - no more - after the arrival of Jim Hayes and now Brady & Co. Are they trying to get rid of the Advisory Boards too? Until the resolutions were introduced at the 2022 annual meeting none of us had even heard of any of those changes! We hear of nothing now. We aren't asked, informed but may have a speaker who sorta kinda asks for "our feedback" AFTER a program has already been introduced, started rolled out, and expanded. Members now have no say and unless we continue to work hard to replace the next 4 board members who will be up for e-election next year we, as members, will continue to have no say about how OUR money is being spent and HOW any new programs may benefit or be a detriment to ALL members. Wake up people - THIS is the NEW SECU! The movement towards making us a B A N K is in fast forward mode!!!
ReplyDeleteHere's an article to read that is on SECU website ... straight from the horse's mouth
Deletehttps://wearesecu.org/our-members-come-first-prioritizing-member-experience-at-secu/
it's always interesting to read 'what they say' and then hear 'what they do' ...
"The movement towards making us a B A N K is in fast forward mode!!!"
DeleteExactly how the banks operate ... trust me I seen it first hand ....
Is the use of a credit score in any financial product justified?
ReplyDeletebottom line, they don't care that you pay more in interest and that's just the beginning... The credit union is slip sliding away ... It's hard to come to grips with that fact.
ReplyDelete