Financial Literacy

National Bankers Association Pushes for Sustainable Ownership Within Communities of Color

The National Bankers Association, at its upcoming 88th Annual Convention, to be held October 5 – 7 at the Savannah Desoto Hilton Hotel, is tackling the issue of declining homeownership rates among African-American and Hispanic-American populations. Under the theme: “Promoting sustainable homeownership within communities of color”, the Association has assembled industry leaders in the public and private sectors who will address the impediments to homeownership and propose solutions for reversing the trend.

Thomas Curry, U.S. Comptroller of the Currency, will hold an informal discussion with NBA banks. Other governmental agencies participating in the conference are: Federal Deposit Insurance Corporation (FDIC), Federal Reserve Bank (FED), U.S. Small Business Administration, Fannie Mae, U.S. Department of Housing and Urban Development (HUD0, and the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI).

Citing a recent trend, the National Association of Real Estate Brokers’ President Ronald Cooper stated: “According to the most recently disseminated U.S. Census Bureau America Housing Profile Fact sheet (May 2015), the homeownership rate for the fourth quarter 2014 for African-American homeowners declined to 41.8 percent – the lowest reported rate since 1980. Hispanics are also struggling to increase their homeownership rates.”

This year’s convention has invited the participation of major corporations like Radian Guaranty, largest provider of private mortgage insurance in the country, as well as Promontory Interfinancial Network, a trusted partner to 3,000 financial institutions, to assist minority banks with strategies that will strengthen their abilities to do more mortgage lending.

On hand to help the banks better position themselves to sell more mortgage loans to the secondary market will be the country’s only African-American Ginnie Mae issuers, Lois Johnson, CEO of United Security Financial.

Vantage Score 3.0, a subsidiary of Experian, Equifax and Trans Union, will seek to partner with minority banks in a well – orchestrated effort to convince Fannie Mae and Freddie Mac (Government Sponsored Enterprises) to accept alternative credit scoring models, thus making millions of consumers worthy of credit consideration who are presently locked-out if FICO retains its unchallenged position of dominance within the credit scoring space.

Lisa Rice, executive vice president, National Fair Housing Alliance, has pointed out how credit scoring mechanisms produce disparate and unreliable negative outcomes for borrowers of color and discussed how all these issues contribute to the widening wealth gap in America.

The Consumer Financial Protection Bureau (CFPB) did not respond to the NBA’s invitation to participate.

Working on a strategy that will include national organizations, the regulatory community, various the agencies of the federal government and the private sector, Michael Grant, president of the National Bankers Association, also has plans to take the case for sustained homeownership within communities of color to President Barack Obama. Grant stated: “This is clearly a President who knows how to get things dome. If he could capture Osama Bin Laden, rescue the U.S. economy from near collapse, give the nation its first national healthcare program, save the auto industry and negotiate with Iran to halt its progress toward the development of a nuclear bomb, he can help communities of color to regain the wealth that they lost during the great recession by making homeownership for these communities one of his administration’s top priorities.”

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