11 Million Households Could Be Evicted Over the next Four Months

Executives from the country’s four biggest banks — Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — have asked the Department of Housing and Urban Development not to rewrite requirements to ensure they’re not accidentally discriminating against Black and Latino customers in their mortgage businesses, the New York Times reported. “HUD should acknowledge that Americans’ attention to racial discrimination is more pronounced and expansive,” Michael DeVito, Wells Fargo’s executive vice president for home lending, said in a letter to HUD Secretary Ben Carson on Tuesday. “People across the country have considered more closely that centuries of discrimination, segregation and economic disenfranchisement have lasting impacts today, including discriminatory effects in housing,” DeVito wrote. Although the banks stopped short of saying no policy change should ever be made, the request for a delay was unusual in the world of finance, where firms regularly seek fewer regulations. The proposed change would spare the banks from fines and legal fees by effectively reducing the number of lawsuits and government enforcement actions against them. It would also make it easier for banks to use algorithms and artificial intelligence to market, underwrite and price home loans without worrying whether those calculations accidentally discriminated against disadvantaged groups. But the banks may be realizing there’s more to the issue than the regulatory and legal considerations. The proposed rule governs the concept of “disparate impact,” in which a practice by a lender or housing provider creates an unequal playing field, even if unintentionally. Policies that have a disparate impact on disadvantaged groups are illegal under the Fair Housing Act of 1968.
The House Financial Services Subcommittee on Oversight and Investigations will hold a hearing at noon ET today titled "Protecting Homeowners During the Pandemic: Oversight of Mortgage Servicers’ Implementation of the CARES Act." For the full witness list, access to prepare testimony and a link to the live webcast of the hearing, please click here.