Banks Are Racially Profiling Mortgage Applicants — The Government Requires It
Your banker is racially profiling you when you apply for a mortgage loan. If he doesn’t, the lending institution you’re applying to is subject to harsh federal penalties for not engaging in racial profiling. The most amazing part of the applicable federal regulation is that if you refuse to disclose your ethnicity and race, the banker is required to visually appraise you, make a guess as to your race/ethnicity based on your appearance, and then report those racial observations to the government.
Bull Connor smiles.
The left has racialized pretty much everything it touches, and during the Obama administration, the Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank legislation. The CFPB was the brainchild of Sen. Elizabeth Warren of Massachusetts. Among the tasks taken on by the CFPB is the gathering of information regarding an applicant’s ethnicity, race, and sex under the Home Mortgage Disclosure Act.
The good news is that Donald Trump has been trying to kill off the CFPB. The bad news is that it’s not dead yet, so mortgage lenders across the country are still being drilled on the importance of viewing customers through the prism of race, and learning how to provide reporting based on observed skin color, accent, surname, hairstyle, and other ethnic characteristics of those applying for mortgage loans.
At this link is a typical “Demographic Information Addendum” from a credit union’s mortgage application, which reads in part [emphasis added]:
For residential mortgage lending, Federal law requires that we ask applicants for their demographic information (ethnicity, sex, and race) in order to monitor our compliance with equal credit opportunity, fair housing, and home mortgage disclosure laws. You are not required to provide this information, but are encouraged to do so. You may select one or more designations for “Ethnicity” and one or more designations for “Race.” The law provides that we may not discriminate on the basis of this information, or on whether you choose to provide it. However, if you choose not to provide the information and you have made this application in person, Federal regulations require us to note your ethnicity, sex, and race on the basis of visual observation or surname.
For those of us who have lived our lives embracing the idea that America should be color-blind, it is appalling that the government is mandating that businesses visually assess their customers and report ethnic and racial characteristics “on the basis of visual observation or surname.”
Further, if a consumer is applying for a mortgage by phone, the mortgage banker must interrogate the applicant about his race, sex, and ethnicity.
I have never been employed in consumer mortgage lending, so I’ve never had to engage in government-mandated racial profiling. But I would find it extremely offensive, and it would be tempting not to comply at all.
As it turns out, hundreds of Bank of America mortgage bankers did find those racial profile questions so offensive that they routinely refused to play along. Instead, they simply noted on the mortgage application that the customer applying by phone refused to provide the racial information.
Unfortunately, the racially-obsessed bureaucrats at the CFPB noticed that Bank of America had a higher percentage of “information-not-provided” customers than other large banks (13 percent versus 10 percent). The CFPB then started breathing down Bank of America’s neck, and the “information-not-provided” rate dropped to single digits as the bank pressured its employees to talk to customers like a 1960s segregationist. But once Bank of America eased up on its employees, the “information-not-provided” rate climbed back up again. (RELATED: The Debanking of the American Conservative)
To punish Bank of America for not properly interrogating its customers on the racial composition of their bloodlines, the CFPB imposed a $12 million fine on the bank in 2023. The Consent Order imposed on Bank of America, dated November 2023, is at this link. It is a long, disgusting read that sounds like the prosecution of a business in the 1950s South for refusing to comply with segregationist Jim Crow laws. Here is just a snippet [emphasis added]:
Some of [Bank of America’s] loan officers continued to record “information-not-provided” without asking applicants for their race, ethnicity, and sex. Specifically, in 2023, before the Effective Date, [Bank of America] began directing loan officers to identify through an electronic flag any call on which the loan officer collected an applicant’s race, ethnicity, and sex. When [the bank] audited those calls, it found that some loan officers were not, in fact, requesting race, ethnicity, and sex information on the flagged calls. [Bank of America] represents that it disciplined certain loan officers as a result.
It was a criminal offense in much of the southern U.S. in the pre-Civil Rights era for a white employee to refuse to comply with the Jim Crow laws. It hardly needs to be noted that Jim Crow was a racist, big-government plan imposed on business by Democrats. So is Elizabeth Warren’s Consumer Finance Protection Board.
Aside from enforcing racial profiling, the CFPB has been an incompetent and corrupt organization that cannot even keep consumer information safe. In March of 2023, it was revealed that a CFPB employee had forwarded to himself more than 250,000 confidential consumer records obtained from financial institutions reporting to the CFPB.
The Trump administration has been trying to kill off the CFPB by starving it of funding. Under acting CFPB head Russ Vought, the administration is also idling those employees who cannot be terminated, and wherever possible, it is suspending all active investigations and projects that were initiated before Donald Trump’s inauguration. The final decommissioning of the Consumer Financial Protection Board cannot come soon enough.
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