February 20, 2020

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HUD Approves California Housing Discrimination Settlement

HUD Approves California Housing Discrimination Settlement

The Department of Housing and Urban Development has announced a settlement in a California housing discrimination case involving complaints of “redlining” against CIT Group, Inc., and CIT Bank, N.A., doing business as OneWest Bank.

Investopedia.com defines redlining as “an unethical practice” that can include denying mortgages, mortgage insurance, or other financial services based on location (the justification being that such locations are “bad neighborhoods”) rather than “an individual’s qualifications and creditworthiness.”

This practice was made illegal by the Fair Housing Act.

Specifically, the Fair Housing Act makes it a violation of federal law for discriminating on the basis of race or national origin to include the practice of denying credit to residents of predominantly minority neighborhoods.

“Homeownership is the foundation of the American dream,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, who was quoted in a HUD press release, adding, “Today’s settlement is an important step toward ensuring access to that dream for all borrowers, regardless of their race or national origin.”

The Fair Housing complaint alleges “that from 2014 to at least 2017 OneWest Bank discriminated in the marketing and origination of home mortgages, as evidenced by the low number of mortgages it made to African-American and Latino borrowers relative to the demographics of the area and to the industry as a whole”.

The HUD press release notes that OneWest Bank “denies discriminating in violation of the Act”, but the settlement includes a requirement that OneWest Bank invest $5 million in a loan subsidy fund “to increase credit opportunities for residents of majority-minority neighborhoods” among other financial penalties.

OneWest Bank must also provide a “full-service branch serving the banking and credit needs of residents in a majority-minority and low-and moderate-income neighborhood” according to HUD.

Sometimes the only people able to prevent future housing discrimination are the current victims of discriminatory practices. Don’t hesitate to report violations of the Fair Housing Act to HUD as the agency may not be aware of the problems you face in your community.

Have you experienced discrimination at any stage of the house hunting or apartment-seeking process? File a complaint with the HUD Office of Fair Housing and Equal Opportunity: (800) 669-9777 (voice) or (800) 927-9275 (TTY).

Joe Wallace - Staff Writer

By Joe Wallace

July 30, 2019

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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