Trump moves to gut Obama housing discrimination rules


“They’re trying to eliminate the ability to enforce fair housing,” said Lisa Rice, president and CEO of the National Fair Housing Alliance. “They do not want to promote fair housing. They do not want to eliminate the vestiges of discrimination.”

One of President Donald Trump’s targets is the same law — the Fair Housing Act — that his family real estate company was accused of violating in the 1970s for trying to keep black people from renting Trump apartments. The Trump Organization settled the case, brought by former President Richard Nixon’s Justice Department, and Trump himself has always denied the charges of racial bias.

Carson says he’s trying to improve the fair housing system, not undermine it.

“To insinuate that Secretary Carson is trying to roll back or weaken the Fair Housing Act is misleading at best,” HUD spokesperson Brad Bishop said, adding that HUD has brought in nearly $28 million for discrimination victims under Carson.

Obama tried to add teeth to the fair housing law, which passed in 1968 within a week of the murder of Martin Luther King Jr. as deadly riots swept through largely black neighborhoods in cities across the country.

The act outlawed discrimination in housing. It also required communities to work to end segregation, but a government audit in 2010 found that HUD’s enforcement of the law was largely ineffective. Obama addressed that in 2015 by requiring local governments to track patterns of poverty and segregation with a checklist of 92 questions to gain access to federal housing funds.

Carson called Obama’s system too burdensome and said last year that it was “actually suffocating investment in some of our most distressed neighborhoods.” This month, he moved toward scrapping the tracking system with a proposal that doesn’t include the term segregation.

Separately, Carson’s also finalizing a policy rolling back the Obama administration’s efforts to combat discrimination even when it isn’t intentional — such as when mortgage lenders use computer algorithms to determine creditworthiness that disproportionately reject minority applicants.

HUD says its proposal brings the policy in line with a 2015 Supreme Court decision that said liability for unintentional discrimination “must be limited” to ensure employers can make “practical business choices.”

But housing activists see the shift away from proactive racial integration as an abdication of the agency’s responsibility under the Fair Housing Act, even as black homeownership hovers near its lowest rate since segregation was legal. The white rate is about 73 percent, compared with a little under 43 percent among black people.

“This idea that pretending that housing discrimination based on race and other protected characteristics doesn’t exist is very dangerous,” said Nikitra Bailey, executive vice president of the Center for Responsible Lending.

“One of the things that I want to be careful with is pretending this is yesterday; we know this is ongoing,” Bailey said.

Every Senate Democrat signed onto a letter Senate Banking Committee ranking member Sherrod Brown (D-Ohio) wrote to Carson in November saying they were “deeply troubled by the direction this administration is heading in relation to fair lending and fair housing protections.”

The administration’s attempts to rewrite the enforcement of laws on housing discrimination and segregation aren’t limited to HUD. Joseph Otting, the Trump appointee who heads the Office of the Comptroller of the Currency, wants to change the rules governing the Community Reinvestment Act, a 1977 law designed to reverse decades of discriminatory government policy discouraging lending and investment in poor neighborhoods.

To counteract that discriminatory policy, known as redlining, banks are now required to lend and invest in lower-income communities. But to the dismay of Waters and housing advocates, Otting wants to evaluate banks’ compliance based on the amount of money spent within lower-income neighborhoods, a method that they say could ignore residents’ input.

Otting says he’s trying to give banks more certainty about how the law will be enforced, to ensure more money flows to lower-income and minority borrowers.

But community groups and Democrats say his proposed overhaul might allow banks to meet their obligations under the CRA by funding construction projects, such as hospitals or sports stadiums, that aren’t explicitly designed to serve local residents.

Waters has called Otting to the Hill this week to testify before her committee at a hearing she titled, “The Community Reinvestment Act: Is the OCC undermining the law’s purpose and intent?”

Housing advocates say they’re also worried about a dropoff in fair lending enforcement. Housing discrimination complaints rose 8 percent in 2018, according to the National Fair Housing Alliance, to the highest level since the group started tracking the data in 1995.

The Consumer Bureau has filed only one fair lending enforcement case in the two years since Trump appointees took over the agency, down from 14 over the five-year tenure of former director Richard Cordray. That record, coupled with a reorganization downgrading the agency’s Office of Fair Lending, spurred Brown and Sen. Elizabeth Warren (D-Mass.) last month to request a Government Accountability Office investigation.

Consumer Bureau Director Kathy Kraninger has also proposed taking aim at a regulation that tracks discriminatory lending, calling for public comment on the “costs and benefits” of collecting additional data as a 2015 agency rule requires.

A Consumer Bureau spokesperson said a proposed change to the rule would give regulatory “relief to smaller community banks and credit unions” without altering the broader underlying law. Activists are raising alarms that that proposal could exempt up to 85 percent of lenders from reporting any lending data at all.

“I think there’s an effort by this administration to narrow the scope and the sort of meaning of civil rights protections so there’s just a hollowed-out husk of what’s actually protected,” said Thomas Silverstein of the Lawyers’ Committee for Civil Rights Under Law.



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