Banking – Mortgage Lending

The District of Columbia has a banking problem. Concerned DC residents, elected officials, organizations, churches, and others have experienced a dearth of sound financial services and branch locations in various communities, a vacuum of community lending staff at most large financial institutions, and the inability of credit worthy, lower-income borrowers to obtain mortgages. In addition to these  on-the-ground experiences, a recent report by the National Community Reinvestment Coalition (NCRC) shows that all lenders as a group:

  • made a disproportionately low percentage of home loans to African-Americans, low- and moderate-income (LMI) borrowers and female borrowers
  • denied African-American, Hispanic and LMI borrowers roughly 2 times more than their white and middle- and upper-income peers
  • have much fewer bank branches in  LMI and minority communities

As a way to address these pressing banking issues, Councilmember Jack Evans introduced the Community Development Amendment Act of 2013 (for more detailed info on  bill as introduced, click here). This important legislation would require banks who want to hold any portion of the District government’s $2 billion in deposits to submit and report on plans to serve all credit-worthy borrowers and communities in DC.  Similar Responsible Bankings Ordinances have passed in other jurisdictions across the United States, a grassroots movement for greater financial accountability and a more equitable distribution of financial services.

“Subprime lenders are gone and what we need are lenders making good loans to return to the community. Low-income borrowers, with fixed-rate loans did very well during the housing crisis. Lenders doing business with the DC government need to step in and do business with these credit-worthy residents. We need good money to keep the bad money from coming back.” Frank Demarais, Vice President and General Manager, Manna Mortgage.

This piece of legislation was unanimously voted through by the DC City Council on December 2. We will be working with the appropriate government agencies to prepare implementation as well as other ways to get more banks involved in meeting financial and credit needs of DC residents and neighborhoods. Stay posted!

You can also see photos from the February 28, 2014 hearing held by the Committee on Banking, Consumer and Regulatory Affairs here and here.

The  Community Groups supporting this effort include, but are not limited to:

Anacostia Economic Development Corporation

Coalition for Nonprofit Housing and Economic Development

DC Fiscal Policy Institute

Fair Budget Coalition

Greater Washington Urban League

Jews United for Justice

Jubilee Housing

Latino Economic Development Center

Manna, Inc.

Mi Casa, Inc.

NAACP – Washington, DC Branch

Pennsylvania Avenue Baptist Church

Training Grounds, Inc.

United Planning Organization

University Legal Services

Urban Housing Alliance

Ward 8 Workforce Development Council

Washington East Development Alliance

 

2 thoughts on “Banking – Mortgage Lending”

  1. I absolutely love your blog and find the majority of your post’s to
    be just what I’m looking for. Do you offer guest writers to write content for yourself?
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  2. The DC Government and lending institutions need to make a concerted effort to provide funding to low to moderate income people to purchase homes in Washington DC. We have been through this before with other lenders like Fleet Mortgage and other lenders. That’s why NACA was formed. Let’s not make the same mistake again! Make the lending institutions step up to the plate to rebuild America and Washington DC. If they are caught red lining again, make them pay. DC is committed to helping why not the lenders too?

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