predatory lending

By Lisa Rice, vice president of the National Fair Housing Alliance. Rice will be participating in a panel discussion on jobs and economic justice this Friday at the Congressional Black Caucus Foundation’s Annual Legislative Conference.

It’s disheartening, but not surprising that the Pew Research Center reports that the median wealth of American white households is 20 times that of African American households and 18 times that of Hispanic households. This historic gap in wealth continues to widen and is the result of a toxic mix of longtime segregation, high unemployment rates, falling home values and skyrocketing home foreclosures that is severely impacting communities of color. These ills are not natural occurrences, but the result of federal policies that until recently have ignored job creation and wage support in communities of color and allowed the peddling of predatory, abusive and discriminatory loan products to African American and Hispanic homebuyers to go unchecked.

In August, the Bureau of Labor Statistics reported an overall unemployment rate of 9.1 percent, which is unchanged from July and represents 14 million Americans. But African American unemployment jumped to 16.7 percent – the highest level since 1984 – while the white jobless rate fell slightly to 8 percent. For Hispanics, unemployment remained stable at 11.3 percent in August, while Asian-American unemployment dropped to 7.1 percent, according to the Bureau of Labor Statistics. More than 155,000 African-Americans obtained employment in August; even so that wasn’t enough to counter a surge in unemployment numbers for the group. At least 1.4 million African Americans have been out of work for more than six months.

Some reasons for the disparity in employment for African Americans may include: a younger work force, fewer members obtaining college degrees and a larger share of the population living in areas severely impacted by the recession. Even if those factors are taken into account a disparity persists and racial discrimination can’t be ignored, explains Algernon Austin, director of Race, Ethnicity, and the Economy program for the Economic Policy Institute. Austin told CNN Money.com, “Even when you compare black and white workers, same age range, same education, you still see pretty significant gaps in unemployment rates. So I do think the fact of racial discrimination in the labor market continues to play a role.”

For most of us employment is essential for income to sustain our most basic necessities – food, shelter and health care. That income, if sufficient and properly managed, can also be used to leverage a time honored vehicle for asset accumulation in this country: homeownership. Millions of Americans tap the equity in their homes to pay for their child’s college education, fund start-up businesses, pay for retirement, and weather economic uncertainty. For communities of color, homeownership rates have historically lagged behind that of white Americans though the long trend has been upward. African American homeownership has doubled from 22.8 percent in 1940 to 45.9 percent in 2010.  Comparatively, homeownership for whites increased from 45.6 percent in 1940 to 74.4 percent in 2010. According to the Joint Center for Housing Studies at Harvard University about 47.5 percent of Latinos and 58.2 percent of Asian-Americans owned a home in 2010.