Redlining established racial segregation and discrimination against minority populations with sales practices of the National Association of Real Estate Boards and theories about race and property values codified by economists with enforcement by the National Housing Act of 1934.The implementation of this federal policy accelerated the decay and isolation of minority inner-city neighborhoods through withholding of mortgage capital, making it even more difficult for neighborhoods to attract and retain families able to purchase homes.
Richard T. Ely favored eugenics, arguing the "unfit" should be kept from reproducing. Ely argued that blacks were "for the most part grownup children, and should be treated as such. Ely was an advocate for redlining (which entails racial segregation and discrimination in real estate), and has been considered influential in the institutionalization of redlining practices in the United States. The Fair Housing Act of 1968 was passed to fight the practice of redlining. According to the Department of Housing and Urban Development, "The Fair Housing Act makes it unlawful to discriminate in the terms, conditions, or privileges of sale of a dwelling because of race or national origin. Breaking News Has Uncovered Largest Credit Union rejected half its Black mortgage applicants after decades of HUD making it unlawful for any person or other entity whose business includes residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race or national origin. The Office of Fair Housing and Equal Opportunity was tasked with administering and enforcing this law. Breaking News has uncovered that Navy Federal Credit Union in the US has the widest disparity in mortgage approval rates between White and Black borrowers of any major lender. Navy Federal Credit Union, that has Army, Navy, Marines, Coast Guard, Air Force active credit members, approved more than 75% non-Hispanic and black borrowers who applied home purchase, but less than 50% of Black borrowers with Hispanics receiving a little above the 50% ratio who applied for the same type of loan were approved. Redlining has crippled single home and multi family home purchases and decreased the American dream for families for decades. With robust investigation by the US government and hefty penalties leveraged against banks, the practice continues. May 2015, the U.S. Department of Housing and Urban Development announced that Associated Bank had agreed to a $200 million settlement over redlining in Chicago and Milwaukee. Associated Bank rejected mortgage applications from black and Latino applicants. The final settlement required AB to open branches in non-white neighborhoods. New York City reached a settlement with Evans Bank for $825,000 in 2015.
Potential home buyers were not shown listings in Non-Hispanic and Black communities to assist in the redevelopment of improvised neighborhoods. Hispanic and Black potential home buyers from 2009 and 2012 when rates were at their lowest were awarded home loans at percentages exceedingly lower than non-Hispanics. New York City is the dominant housing investment destination for real estate investors but only four Black families was approved for home loans with AB. Steeper penalties were levied against Hudson City Savings Bank by federal authorities amounting to $33,000,000 also in 2015. HCSB has offices in New Jersey, New York, and Pennsylvania. The feds investigation had proven that HCSB was intentionally not approving home loans to Hispanics and Blacks and purposely discriminating in broker practices, avoiding redevelopment funding into minority-majority communities. The bank located branches and loan officers in selected territories with preferred mortgage brokers, and discouraged redevelopment efforts by prospective borrowers in predominantly Black and Hispanic communities.The Justice Department called it the "largest residential mortgage redlining settlement in its history. 80 percent of its mortgage applications from mortgage brokers were approved but the brokers were not located in majority Black and Hispanic areas. Hudson City will pay $25 million in direct loan subsidies to qualified borrowers in the affected communities, $2.25 million in community programs and industry training. In 2023, City National Bank of California agreed to pay $31,000,000 to resolve allegations of redlining from 2017 to 2020, brought by the United States Department of Justice. While most conservative and liberal Senators and congressmen attempt to downplay institutional racism, the statistics show that Navy Federal which claims to be a member-owned and not-for-profit credit union exclusively serving the military, veterans and their families should be throughly investigated. Navy Federal Credit Union was founded during the Great Depression by 7 Navy Department employees who wanted to help themselves and their co-workers reach their financial goals. They envisioned a credit union that would offer loans with affordable rates and manageable terms. They wanted to encourage building financial security by providing a safe place to deposit savings and earn dividends. Since 1933, their member-owners include all branches of military and DoD employees and their family members. In 2023, they boast 12 million member-owners with assets totaling $159.8 billion.
Because we’re not-for-profit, any surplus funds are returned to our members as dividends, reduced loan interest and improvements to our products and services. That means we have great rates, lower fees and exclusive discounts. A not-for-profit organization often operates like a typical business; however their primary goal is not to make a profit. Typically the primary goal of a not-for-profit institution is to provide services for a specific purpose or to benefit a group of people (i.e. financial services for credit union members). When revenue is made by a not-for-profit entity that income is reinvested back into the organization instead of paid back to stockholders. Again in the example of Navy Federal Credit Union, the profits are reinvested back into the financial institution in order to keep deposit rates higher, lending rates lower and impose fewer fees than compared to those at a bank, which is for-profit. Hispanic and Black applicants who had similar incomes and debt-to-income ratios above Non-Hispanic borrowers were denied home loans in disappointing percentages. Navy Federal have denied allegations of redlining but Black and Hispanic member-owners with Navy Federal were routinely denied loans than Non-Hispanic member-owners even with different variables including income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics were the same. For many years, urban community organizations had battled neighborhood decay by attacking blockbusting (deceptive encouragement of white flight from neighborhoods in order to buy up real estate at a huge discount and then rent to low-income, usually black tenants), forcing landlords to maintain properties, and requiring cities to board up and tear down abandoned properties. These actions addressed the short-term issues of neighborhood decline. Neighborhood leaders began to learn that these issues and conditions were symptoms of disinvestment that was the true, though hidden, underlying cause of these problems. They changed their strategy as more data was gathered.
Veterans that have served their country must be entitled to the American dream but the credit union rejected thousands of Black applicants for home purchase while they approved Latino borrowers at significantly lower rates than White borrowers. The United States Federal Government has enacted legislation since the 1970s to reduce the segregation of American cities. While many cities have reduced the amount of segregated neighborhoods, some still have clearly defined racial boundaries. Since 1990, the City of Chicagohas been one of the most persistently racially segregated cities, despite efforts to improve mobility and reduce barriers. Other cities like Detroit, Houston, and Atlanta likewise have very pronounced black and white neighborhoods, the same neighborhoods that were originally redlined by financial institutions decades ago. While other cities have made progress, this continued racial segregation has contributed to reduced economic mobility for millions of people.