The Center for Responsible Lending hosted a discussion panel to address the impact of COVID-19 on various financial sectors as it relates to Black Americans on Monday evening.
The non-profit research and policy organization is targeted towards the education surrounding predatory lending, a practice commonly directed towards minority communities. The virtual town hall, moderated by White House Correspondent and CNN Political Analyst April Ryan, focused primarily on the areas of small businesses, housing and student loans with a particular emphasis on minority and Black communities.
“I have approached the COVID-19 pandemic on the perspective of trying to imagine myself three years from now, looking back on this year and wondering what I will have missed?” said NAACP Legal Defense and Educational Fund, Inc. President and Director-Counsel Sherrilyn Ifill. “What will we not have done to ensure the survival and health of the Black community?”
Opening remarks by Representative and Chair of the House Financial Services Committee Maxine Waters concentrated on the importance of proper funding for small, minority-owned businesses especially when it comes to the Paycheck Protection Program (PPP).
In April, big banks including Bank of America, Wells Fargo, JPMorgan Chase and US Bank were accused of prioritizing their larger customers resulting in a lack of money for smaller businesses.
“We know that with the first roll-out of the CARES Act that banks and big financial institutions took care of their concierge clients… and so we have many in our community that were absolutely disappointed, who stood in line even got numbers waiting to be contacted only to find out that the money had dried and they were left without the funding,” Waters said.
To rectify this, Waters has proposed a $60 billion supplemental emergency legislation for the Minority Depository Institutions (MDIs), Community Development Financial Institution (CDFIs), Black banks, credit unions and community banks.
“We’re working to correct what has been missing in our community for so many years. The [Small Business Administration] never paid real attention to the Black community,” Waters said.
According to Maxine Waters’ website “$30 billion was assigned to MDIs, banks and credit unions with less than $50 billion in assets, and the remaining $30 billion was assigned to MDIs, CDFIs, certified development companies and microlenders that have less than $10 billion in assets.”
President and CEO of the National Bankers Association Kim Saunders advised during the panel that those looking to access the second round of PPP loans should start by speaking with their current bank.
If the PPP loan is not offered, then those interested can contact someone by visiting nationalbankers.org for further assistance, Saunders said.
A discussion on housing and its relation to COVID-19 was led by Lisa Rice, president and CEO of the National Fair Housing Alliance.
“One of the things that the COVID-19 pandemic and crisis have revealed is the inexplicable links between health and housing. In order for us to get out of this pandemic, people must be able to be safely housed,” Rice said. “We cannot have people facing evictions or foreclosures or being forced to move into crowded situations where physical distancing is impossible.”
Rice said that 4 million instances of housing discrimination are reported every year and the annual Fair Housing Trends Report noted an 8 percent increase in complaints last year. The recently introduced HEROES Act is meant to reinforce fair housing and fair lending protections.
According to the National Low-Income Housing Coalition, the HEROES Act “proposes almost $200 billion in additional funding for housing and homelessness programs to help communities respond to the coronavirus crisis.”
“We’ve worked to ensure that this response to the COVID-19 crisis is fashioned to help dismantle the structural inequalities that are driving the horrific racial disparities that we’re seeing,” Rice said.
Student loan forgiveness has also been a talking point surrounding the effects of the coronavirus with America maintaining almost $1.7 trillion in student loan debts this year.
Ashley Harrington, federal advocacy director of the Center for Responsible Lending, noted that although the Department of Education has paused federal loans for six months, this does not apply to private student loans.
“We were already struggling with student debt. Now we see that this economic and public health crisis is going to exacerbate a crisis that already existed and it was even more of a crisis for Black people,” Harrington said.
According to the Brookings Institution, Black BA graduates default their loans at five times the rate of White BA graduates.
Harrington said student loans can prevent people from buying homes or starting businesses and families due to the looming debt.
“What we’d like to see is across the board relief in terms of debt cancellation and so we’re hoping that other folks will help advocate for across the board debt cancellation for all borrowers not just for our economically distressed because economically distressed right now looks very different than economically distressed did a month or two months ago and it’s going to continue to look different as this crisis continues,” Harrington said.
Executive Vice President of the Center for Responsible Lending Nikitra Bailey said that while relief now is important, a permanent change in the systems that influence disparities within minority communities is also paramount.
“We need to demand more and we have to make sure as we’re demanding more [that] we’re fighting for long term structural changes that will address the inequities that produce discrimination and challenges that we’re living with today,“ Bailey said.
