Discriminatory auto lending and payday loans are undermining the finances of African-Americans, said the director of the Consumer Financial Protection Bureau on Tuesday.
The director, Richard Cordray, in prepared remarks to the NAACP’s annual conference in Cincinnati, also said that nearly 40 years after the Fair Housing Act was passed, redlining is very much alive in too many places. Redlining is the practice of barring blacks from buying homes in some neighborhoods and charging them excessive mortgage interest rates where they are purchasing.
“These economic injustices deny opportunity, drain wealth and desecrate communities,” Cordray said in the remarks.
These practices exacerbate stark economic divisions, he said. The rate of home ownership is 42 percent among blacks while it’s 71 percent for whites. White households have an average net worth of $134,000 while the African-American household average is only $11,000. Household incomes average $35,000 for African-Americans and $60,000 for Caucasians.
“For too many consumers of color, the pursuit of prosperity can be difficult or even ruinous,” Cordray said. “Active discrimination, fueled by conscious or unconscious prejudice, has hindered millions of African-American consumers from getting ahead, or even keeping up. It is crucial … we find lasting solutions.”