Title
Authorizing the Committee on Legislative Oversight to hold hearings examining racial disparities in home lending, also known as modern-day redlining, in the City of Philadelphia.
Body
WHEREAS, "Redlining" was a financial-lending practice, sanctioned by the Federal Housing Authority from the 1930s through 1960s, which designated neighborhoods as financially risky based on the racial composition of the neighborhood. The policy was deemed unconstitutional by the U.S. Supreme Court in Shelley v. Kraemer (334 U.S. 1); and
WHEREAS, This practice led to de jure segregation of American cities and neighborhoods, i.e., legally enforced segregation. The practice also contributed to racial disparities in wealth, as people of color were disproportionately unable to purchase homes, an impactful wealth asset; and
WHEREAS, In 1977, the government passed the Community Reinvestment Act (CRA) in order to remediate damage caused by prior lending practices, especially in low- and moderate-income communities. Banks are reviewed and rated on their performance in service their communities. There are four ratings, which range from "substantial non-compliance" to "outstanding". Penalties for not meeting those needs can affect a bank's application to open a new branch, relocate a branch, or other corporate activities; and
WHEREAS, A recent report by the Center for Investigative Reporting (CIR) using public data from the Home Mortgage Disclosure Act found racial disparities in 61 metro areas, including Philadelphia, in three major conventional loan areas: home purchase, home improvement, and refinance loans. Researchers controlled for nine economic and social indicators, including income and the amount of the loan, and found race as a statistically significant factor. Additionally, the report found that the CRA's purpose are subverted because CRA loans in low- and moderate-income communities are disproportionately made to white applicants; and
WHEREAS, Intermediate s...
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