WASHINGTON, D.C., USA — Charlotte Rep. Alma Adams (D), NC-12, briefed members of the House Financial Services Committee on the findings of WCNC Charlotte's investigation into lending disparities during a four-hour committee hearing Wednesday.
"In my district of Charlotte-Mecklenburg a local news outlet analyzed data from 2018 and 2019 in terms of home mortgage disclosures and found disturbing disparities in mortgage lending," Rep. Adams said before entering our story into the record. "Black individuals were being denied two and three times more than white applicants."
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The hearing, titled "Justice for All: Achieving Racial Equity Through Fair Access to Housing and Financial Services," is considered a "historic" step in addressing inequity in homeownership. Committee members spent hours debating possible solutions and questioning five experts.
"It is an unfortunate truth that such injustices persist today, including in the form of barriers that systematically exclude people and communities of color from fair access to housing and homeownership; from access to credit, capital and other financial services; and from opportunities to lead and direct economic policy at the highest levels of the United States government and major corporations," Chairwoman Rep. Maxine Waters (D), CA, said. "All of these barriers have drastically curtailed opportunities for communities of color to build wealth and thrive in our society."
Federal lending laws require banks, credit unions and mortgage companies to make sure a person is able to repay a mortgage before finalizing a loan, but longstanding socio-economic disadvantages make it difficult for people of color to obtain credit-worthiness and get the keys to their own homes.
"Because of systemic racism, it is not the story for enough and that is actually what we have to deal with here," Color of Change President Rashad Robinson said.
WCNC Charlotte's discovery of widespread lending disparities, based on an analysis of two years' worth of federal lending data, left advocates calling for wide-ranging solutions.
Some of those potential solutions surfaced during Wednesday's hearing, including tougher regulations, better targeting of underserved communities, more flexible credit risk assessments, and improving educational opportunities.
In addition to Rep. Adams, two other members of the North Carolina delegation spoke during the hearing.
"Racism is real," Ranking Member Rep. Patrick McHenry (R), NC-10. "We all know that the way to fix a problem is to acknowledge it, understand and address it, so that's what we're going to try to do today."
Following his opening comments and before asking questions, Rep. McHenry reminded committee members that anti-redlining, fair lending and discrimination laws are currently on the books with the hope that they will help reduce lending disparities over time.
Rep. Ted Budd, (R), NC-13, meanwhile, said, "I've heard a lot of bad ideas floating around this morning, this afternoon," after highlighting the importance of earning high school degrees, which led to the discussion of the importance of work and marriage.
"The evidence shows marriage before children has a significant impact on your likelihood of economic success," Vertex Partnership Academies President and Co-Founder Ian Rowe said in response to Rep. Budd's question. "That's not saying we shouldn't also be looking at structural barriers to reduce, but we know both elements are part of the equation here. There's such a focus on the systemic barriers, that the kids in my schools can start to hear this overwhelming message that they don't have the ability to succeed and the reality is there are millions of people of color who are succeeding today and we need to learn from success."
In addition to stronger efforts by regulators and lenders, advocates believe borrowers need to do more too, especially when it comes to improving financial literacy.