Biden Administration Announces Redlining Initiative

The Justice Department announced Friday its “most aggressive and coordinated” effort to root out redlining in the housing industry.

“Our new Initiative should send a strong message to banks and lenders that we will hold them accountable as we work to combat discriminatory race and national origin-based lending practices,” Kristen Clarke, the department’s assistant attorney general for the Civil Rights Division, said at a news conference.

DoJ officials noted that the gap in homeownership rates between white and Black families is larger than it was in 1960.

The initiative will include enforcement at both depository and non-depository institutions. Department officials also said they will work more closely with federal financial regulators to ensure that redlining cases are referred to the DoJ.

At the same news conference, Consumer Financial Protection Bureau Director Rohit Chopra said that his agency will be analyzing possible digital and algorithmic redlining.

“Technology companies and financial institutions are amassing massive amounts of data and using it to make more and more decisions about our lives, including loan underwriting and advertising,” he said. “While machines crunching numbers might seem capable of taking human bias out of the equation, that’s not what is happening.”

He said that the speed with which banks and other lenders are turning lending decisions over to algorithms is concerning. “We should never assume that algorithms will be free of bias,” he added.

Related:

Freddie Mac: Property in Minority Communities Reflect Appraisal Bias

Spread the word. Share this post!