Forty years ago Gale Cincotta, affectionately known in the community organizing world as the mother of community reinvestment, led her troops into bank lobbies, effectively shutting them down for the day, held barbeques on the front yards of bank executives, and threatened Federal Reserve Chairman Paul Volker that she would hang a "Loan Shark" sign over the Federal Reserve Board office in Washington, D.C. Since that time a fair housing/fair lending/community reinvestment infrastructure has emerged, changing the way the nation's financial institutions and housing providers do business. With the passage of fair housing and fair lending laws, lawsuits and administrative complaints to enforce them, community reinvestment agreements and other tactics, a tradition of redlining and disinvestment slowly evolved into a commitment to fair housing and reinvestment. But has this movement run its course? And do the Occupy Wall Street protests, which are reminiscent of what Cincotta was doing 40 years ago, portend the next wave?
Going back at least to the creation of the Federal Housing Administration (FHA) in 1934, virtually all branches of the housing industry, along with the government agencies that regulated it, practiced explicit, overt racial discrimination. Early FHA underwriting manuals stated that "if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes." Until 1950, the National Association of Realtors stated in its code of ethics, "a realtor should never be instrumental in introducing into a neighborhood...members of any race, nationality or any individuals whose presence will clearly be detrimental to property values in that neighborhood." Racially restrictive covenants assured that properties in the more desirable neighborhoods would stay in white hands.
The Civil Rights Movement eliminated virtually all the explicitly discriminatory rules of real estate agents, mortgage lenders, and other housing providers, though discriminatory practices persisted. A host of community organizations, consumer advocacy groups, fair housing agencies, sympathetic attorneys, supportive foundations, some elected officials, and others developed a range of skills (e.g., research, litigation, communication, advocacy) to change the way housing and related services were normally provided. The better known names that have constituted this community reinvestment infrastructure include National People's Action and National Training and Information Center started by Cincotta, National Fair Housing Alliance (NFHA), National Community Reinvestment Coalition (NCRC), ACORN, Center for Responsible Lending, Consumer Federation of America, and, more recently, Americans for Financial Reform.
This movement has had many successes. Key federal laws include the 1968 Fair Housing Act and subsequent amendments, Equal Credit Opportunity Act (ECOA), and the Community Reinvestment Act (basically a federal law prohibiting redlining).These and other statutes put the federal government and many state and local governments on the side of fair housing after explicitly enforcing discriminatory rules for decades. According to NCRC, the CRA has generated $4 trillion in new loans in traditionally underserved communities. NFHA reports that since 1999 fair housing organizations have assisted in lawsuits that have generated more than $380 million for victims of housing discrimination through various enforcement activities.
At the same time. NFHA has estimated that there are approximately four million incidents of housing discrimination that occur each year, but just over 28,000 complaints were filed with fair housing enforcement agencies in 2010. Levels of segregation have been reduced modestly in recent decades, though black/white segregation in those large cities where the black population is highly concentrated (e.g., New York, Chicago, Detroit, Cleveland, Milwaukee) still amounts to what Douglas Massey and Nancy Denton referred to as hypersegregation in their classic book American Apartheid. At the same time, Hispanic and Asian segregation has not been reduced in recent decades. Noting the persistence of housing discrimination despite increased enforcement efforts, Robert Schwemm, one of the nation's leading fair housing legal scholars, recently asserted, "something new must be tried."
In describing the success of community reinvestment organizing efforts, Peter Dreier, former director of housing for the Boston Redevelopment Authority and currently a sociologist at Occidental College, referred to CRA-related initiatives as "the most successful example of grassroots community organizing since the mid 1970s." But he also noted that "this is sort of like being the tallest building in Topeka; there's not much competition." He went on to describe challenges that confront this movement, including the increasing concentration and power of the financial services industry. If the community reinvestment movement is to build on its success in the latter decades of the 20th Century and meet emerging 21st Century challenges, he argued that fair housing and fair lending groups will have to form stronger coalitions with labor unions, environmental groups, progressive elected officials and others who are struggling with their own versions of uneven and inequitable development.
Here is where Occupy Wall Street comes in. While the demands of the protesters range far beyond mortgage lending and fair housing, much of their anger is directed at financial institutions and the many ways they have failed to serve 99% of the nation while enriching themselves, often with major government aid. And participants include labor unions, church groups, and many other progressive organizations, along with the fair housing and community reinvestment groups that are the legacy of Gale Cincotta.
It remains to be seen, of course, whether recent moments become a movement. But many of the hundreds of organizations involved in the Occupying protests across dozens of cities in the U.S. and elsewhere have already announced future plans. If their goals are not specific enough for some pundits, it is clear to most that economic justice is at the core, and it is also clear what this means in terms of the nation's housing and housing finance markets. Meaningful foreclosure relief including modification of far more mortgages than has taken place to date, full staffing and funding of the new Consumer Financial Protection Bureau, and enforcement of the Dodd-Frank Wall Street Reform and Consumer Protection Act would be a start.
Occupy Wall Street may well be the next wave of the fair housing, fair lending, and community reinvestment movement. By bringing far more direct action to center stage (which reflects in part going back to its civil rights era roots), energizing a broader and therefore stronger coalition (which is also reminiscent of earlier activities), along with continued development of the research, litigation, and advocacy skills that have been developed in recent decades, we may witness a surge in fair housing, fair lending, community reinvestment and economic justice activities and outcomes in the near future.
Gregory D. Squires is a professor of sociology and public policy and public administration at George Washington University
Chester Hartman is Director of Research at the Washington, DC-based Poverty & Race Research Action Council.
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Kevin L. Petrasic: The Consumers' Role in CFPB Supervision
I mean seriously Gregory D. Squires and Chester Hartman - have you two been off campus in the last decade? Two years ago in a large city near me a minimum wage Hispanic was approved for a home loan for $130k.....and the kid had a 3% down payment too.
Too call that discriminitory lending is laughable. Completely laughable...............There is no where on THE PLANET someone can get that kind of financing for a house - this race or that.
At the end of the day - it all comes down to this - does the individual have the sense to not take on debts that they cannot afford - and for those that do - who is going to pay for it?
I believe that Occupy Wall Street is a "MORE than a Box" movement ... and if some want to use the movement to represent Fair Housing Activism, I'd say: Go for it!
The Occupy Movement is MORE than a Box!
I do like your analogy; the movement IS more than a Box.
>CM