PHILADELPHIA – February 15, 2018 – State Sen. Vincent J. Hughes (D-Philadelphia) reacted angrily to media reports about the continued “redlining” of neighborhoods in Philadelphia, pledging to seek answers via inquires of state officials when they appear before the Senate Appropriations Committee for budget hearings.
Redlining is the practice of banks withholding loans to people of color for home purchases in neighborhoods with a high density of immigrants and African-Americans. The federal Community Reinvestment Act was written to end redlining.
“We need additional details about redlining in Philadelphia and to learn more about the banks who are continuing this insidious practice. They must be held accountable,” Hughes said. “Redlining is illegal. Banks know it and if this reporting is true there must be a reckoning.
“The published reports are harrowing. Discrimination appears rampant in lending practices and we need to get to the bottom of what is happening and learn how these problems can be addressed. African-Americans and other people of color are being denied the American Dream to own a home.”
Hughes said that he planned to pursue multiple initiatives to ferret out details about home lending practices in Philadelphia.
The West Philadelphia lawmaker also said if the details of the reports are found to be accurate, criminal prosecutions are warranted.
He said he will subject state officials who are involved in bank operations and lending to tough questioning when they appear before the Senate Appropriations Committee. Hughes serves as Democratic chair of the committee. The committee will soon hold three weeks of hearings beginning next Tuesday.
He said he is preparing legislation that would ensure greater lender accountability. Hughes also will request that all oversight organization and elected officials at every level engage in a thorough and joint review of the problem.
“If financial institutions participated in this highly illegal behavior, all city and state assets should be divested from their institutions,” Hughes said.
According to today’s Philadelphia Inquirer report, “Why white homeowners in Philadelphia can get federal mortgages meant for black neighborhoods,” researchers analyzed 31 million mortgage records and found that mortgage applications from African-Americans were rejected significantly more than white applicants.
Nationally, the homeownership gap between whites and African-Americans is now wider than it was during the Jim Crow era. This gap has far-reaching consequences. According to Lisa Rice, executive vice president of the National Fair Housing Alliance, “wealth and financial stability are inextricably linked to housing opportunity and homeownership. For a typical family, the largest share of their wealth emanates from homeownership and home equity.
“Since home ownership is the key path to financial security, it seems that we have the answer as to why Philadelphia has the highest poverty rate of any major city in the country,” Hughes said.
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