A series of Federal laws in the 1960s and 1970s was supposed to arm the bank regulatory agencies with the legal resources to overcome a long history of racial discrimination. It has not worked, Cal Bradford shows in this article.

We’re pleased to share this report authored by Woodstock Institute board member Cal Bradford.

Bradford surveyed the record for redlining and race discrimination lending cases from the U.S. Department of Justice, the U.S. Department of Housing and Urban Development (HUD), the Consumer Financial Protection Bureau, states attorneys general, city governments, private attorneys representing parties such as fair housing organizations and other civic and community-based organizations, as well as the prudential regulatory agencies.

This review indicates that in the past 30 years:

• the Federal bank regulators failed to find 85% of the cases where banks discriminated against both individual borrowers and/or entire minority communities.
• The banking agencies failed to find 91% of the redlining cases where banks cut minority areas out of their service areas, failed to make loans to minorities who were in their service areas, or reduced or failed to locate branches in the minority areas in their service areas.

In almost all of these redlining cases, maps made this discrimination vividly clear by showing the service areas, the location of bank branches, or the location of loans compared to the racial composition of the areas. Yet even in these mapping cases, the regulatory agencies failed to find the discrimination the same 91% of the time.

This paper reviews these cases and shows how the regulatory agencies not only failed to find the discrimination but, in some cases, seemed to work hard not to call it discrimination when it was identified.