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Discrimination ‘with a smile’ and for profit

Elizabeth Warren
Discrimination ‘with a smile’ and for profit

Jim Crow laws are long gone, and visible, public discrimination is outlawed — but that doesn’t mean that discrimination doesn’t happen. Today’s discrimination is often quiet, but it still exists — and those who practice it may wear crisp shirts and make big profits.

Just last month, Bank of America’s Countrywide unit agreed to a $355 million dollar settlement with the Department of Justice based on allegations that the lender discriminated against African American and Latino homebuyers.

The Justice Department found that more than 200,000 people across 41 states were sold mortgages with higher interest rates and fees than their white counterparts. From 2004 to 2007 alone, 10,000 of these people received risky sub-prime loans with some of the worst kinds of provisions: prepayment penalties, excessive fees and unavoidable payment hikes.

The Justice Department alleged that they received these terms not because they were higher risk customers, but simply because of their race or national origin.

One assistant attorney general called it “discrimination with a smile” because so many people did not know they were being exploited. The people who took out these mortgages were trying to buy homes to move into better school districts, to create financial security or to give their families a better place to live and a stronger future.

The paperwork was complicated, and they trusted the nationally known company that sold them the loans. The company knew what these families wanted, and it played on their hopes and dreams to swindle them.    

Countrywide’s business strategy focused on Latino and African American communities to expand lending and gain market dominance. The lender gave wide discretion to their loan officers and brokers, and — according to the Justice Department — Countrywide had good reason to know, based on its own internal reporting, that its employees were engaging in outright discrimination.

There’s no reason to believe that Countrywide is the only example of a mortgage company building up its profits by targeting African American and Latino families. According to a research report from the Center for Responsible Lending, even African Americans and Latinos with good credit scores have been more likely to receive high-cost, high-risk, predatory mortgages.

Discrimination strikes at the core of who we are as a people and what kind of country we are building. We should be a country where every person has a chance to get ahead — where we expand opportunity for all and overcome narrow-minded thinking.  

We have not always succeeded in achieving the truths of the Declaration of Independence or the dreams of Dr. Martin Luther King, Jr., but we have tried.

We have worked to build a country of opportunity, a country in which hard work produces real results, a country that matches our best aspirations. Even when we fail, our commitment to expanding opportunity is what makes us exceptional in the world.  

Economic discrimination may be more cunning than the discrimination of Jim Crow, but it too undermines the future we want to build for our children. It leaves people trapped, vulnerable to any financial disruption — an illness or accident, a cutback in hours or a job layoff, or a family breakup.  

The Justice Department’s settlement — the largest settlement in history for residential fair lending — is an important step. But the work of stamping out discrimination and building real opportunity really begins with us.

When discrimination in any form emerges, it is the job of each of us to call it out — plainly and unequivocally. If we do not, if we tolerate racism and let it slip un-remarked, then racism will spread, eating away the core of who we are as a people.

Discrimination is discrimination, even when it comes from a billion-dollar company and is served with a smile.  And it stops only when we make it stop. 

Elizabeth Warren is a candidate for U.S. Senate.

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