By: W.J Loesener
Right off the top, there are two salient features in the quote. The first is that the bank did not want its business in areas where the majority of the population were people of color and the second, is that the New York Times’ source is a federal official. Consider your first impressions about this. Is there surprise running through your mind? Are you just annoyed to read about more “snowflakes” or people whining? Consider the effects of such policies on the population. Examine the socioeconomic effects. This is not just another “complaint” to file in the injustice suggestion box. These types of practices affect everyone because what happens to one of us even in a small way, happens to the rest of us. Ponder on how this simple policy would affect your job: only men can dress casually, women must be in professional business attire the whole year round. If you are a man, you might not say you are affected at all by this policy, but I bet you will see the difference in your female co-worker's behavior because of this policy.
Now, in 2014 Hudson City Savings Bank approved 1,886 mortgages in that area and only 25 of those went to people of color. This is a huge red flag. Any student in finance will tell you how important it is to a community for people to purchase homes. It hurts the financial community ecosystem to have companies operate like this. So much more money could have been invested in that community if redlining didn't exist. Redlining has been illegal for decades, but it hasn't stopped companies from practicing it. In the case of Hudson Savings Bank, though they never admitted their transgressions, they still paid $33 million on the lawsuit that was filed by the Consumer Financial Protection Bureau and the Justice Department. Instead of helping their community, they figured that they'd rather spend their time, and resources on litigation rather than serving the people that live in the communities they conduct business in. No one is naïve enough to believe that a company wouldn’t want to look out for number one first and foremost, but when you are doing well, and in this case exceptionally well, why not at least be fair in your business practices?
It is fine for a bank to avoid borrowers that will probably default, but to exclude an entire community because it’s composed of people of color is not right. It takes away the right of the creditworthy people who live there to buy a home. It must feel terrible to go to a bank filled with excitement in buying a new home, and then later getting denied even though you have good
credit. Buying a home is part of the American dream. Businesses that practice redlining are crushing dreams for (what they think is) the sake of the bottom line and in doing so they are hurting the American people. Hudson City Savings is not the only bank that has done this. There are many more banks, many more lawsuits, and millions of dollars that have been paid as a fine for breaking the law. Eagle Bank (MO), Evans Bancorp (Buffalo, NY), and M&T Bank Corporation have had their own lawsuits. If you look into it, you will find much more. Think about the places you have been. Have you seen with your own eyes, one side of the street where you know prosperity has reigned and if you just look in the other direction, it looks like a disaster? The poor side and the rich side, so close together? Have you ever seen that? That is redlining. That is an