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L.A. County Fair Sept 1-24, 2017

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New Financial Center Aims to Close Racial Wealth Gap - Starting with HBCUs

( - During the 2008 housing crisis, an estimated 7 million Americans lost their homes due to foreclosure. African-Americans were hit the hardest with a loss of nearly $200 billion, according to the Center for Responsible Lending.

As the economy has struggled to recover and the housing market is now at a boon, a groundbreaking new program aims to permanently restore the wealth of Black homeownership - through new career opportunities and financial education at Historically Black Colleges and

The Center for Financial Advancement, to launch this semester at Fisk University in Nashville, "will elevate money management skills, teach students about credit and homeownership plus position many for a financially rewarding career in the mortgage industry," according to a press release.

Fisk will be the first HBCU to participate in the program, a collaboration between Wells Fargo, Mortgage Bankers Association (MBA), Bank of America, and HomeFree-USA, a HUD-approved non-profit organization that specializes in homeownership development, foreclosure intervention and financial coaching.

"There is desire in the African-American community to move up and to uplift ourselves. We just need a little bit of guidance, some direction and just a bit of advice," said HomeFree-USA President/CEO Marcia Griffin, a Fisk alumni and founder of the new program. "The reality is this: Money is made off the backs of those who don't know. The less we know, the more somebody's going to make off of us. The less we know, the more opportunity there is for rip off. I'm here to show the mortgage, real estate, and finance industries what we can do - not just HomeFree-USA, but what HBCUs can produce."

Griffin believes the training of the next generation of mortgage financiers by HBCUs could be pivotal. The need to expand diversity and inclusion in the mortgage industry will be crucial as the face of the typical homebuyer is changing and as the population of America becomes increasingly brown, says a statement announcing the program. Unemployment among Black youth is twice that of White youth according to the Bureau of Labor Statistics. Yet, a 2015 study by the Stratmor Group found:

The average age of a mortgage loan officer is 47.

About 10 percent of loan officers are over the age of 60 while only 3.3 percent are younger than 30.

Only 10 percent of loan officers who reported their ethnicity were Hispanic or Latino, and only 3 percent identified as Black or African-American, while 81 percent self-identified as White.

Organizers of the new center say it aims to address all of these racial disparities and more.

"The benefits in this partnership are two-fold," said David H. Stevens, President/CEO of the Mortgage Bankers Association. "African-American students will develop important money management and financial literacy skills, while also having the opportunity to explore a career in the real estate finance field. At the same time, the industry will benefit from an influx of better educated potential homeowners, not to mention an influx of diverse new talent into the industry who can bring homeownership opportunities in traditionally underserved communities."

Gross racial disparities in America's economic outlook are well-known to economists, who say the wealth gaps will not close without targeted efforts. "African-Americans still earn just 60 percent of what Whites earn. We have just 7 percent of the wealth that Whites have. We have double the unemployment rates. Even with equal incomes, we find it more challenging to get mortgages or other access to capital. And our economic rights are being challenged every day," economist Julianne Malveaux recently wrote in a column, published in Black-owned newspapers across the country.

Disparities in homeownership is "the biggest driver of the racial wealth gap", concludes a Brandeis University study on the roots of the widening wealth gap. The study also points to "toxic inequality" rooted in policies and tax preferences that "favor the affluent". This kind of information - typically unknown to many in the Black community - will be taught in the Center for Financial Advancement.

"We are proud to be part of this effort to prepare more African Americans for successful careers in the mortgage industry while also promoting financial literacy that can lead to an increase in African American homeownership," said Brad Blackwell, executive vice president; Housing Policy and Homeownership Growth Strategies, Wells Fargo, the founding supporter of the Center for Financial Advancement. "Wells Fargo recognizes the important role a diverse workforce plays in making homeownership possible for people in all communities."

Frank L. Sims, Fisk's immediate past president, worked closely as part of the collaboration to assure the establishment of the center. "The mortgage industry has a tremendous opportunity to work with Historically Black Colleges and Universities and nonprofit leaders to ensure that students are well prepared to be the homebuyers of tomorrow," said Sims. "By providing college students a sound foundation, the Center for Financial Advancement will play a crucial role in ensuring the financial readiness of future generations."

Ranked within the top 10 of HBCUs by U. S. News and World Report, Fisk now has a new President Dr. Kevin Rome, who, in an interview with The Tennessean, pointed to "entrepreneurial opportunities" as a possible strategy for growth on campus.

Rome adds, "Fisk has highly skilled and highly intelligent students who can excel in any endeavors that they pursue. It's important that we seek opportunities in non-traditional highly lucrative fields where African-Americans continue to be underrepresented. As consumers who engage in the banking and mortgage industry, African-Americans should equally benefit from the wealth that is created by the industries. This partnership will hopefully lead to a model that funnels more African-Americans into careers that benefit our community and the American economic engine."

The more than 700 students from all majors on the 40-acre campus will have the opportunity to use the center.

"The point here is that people from all majors and all skill levels can get into the industry, and this is the industry where money is made," said Griffin. As an example, she pointed to a HomeFree-USA intern, whose first job at a mortgage agency, paid $80,000 annually - well above the average $50,000 starting salary of college graduates in 2017.

Griffin envisions the Center as a growing program, which will gradually expand to other HBCU campuses.

She also notes that the Center is not just for students, but also for parents, faculty and the community on HBCU campuses. "Because we are in the real estate and financial services business, anything that we can do for and with the families in terms of buying a home, keeping a home, credit enhancement or anything financial. That's a part of the package."

At a glance, the Center for Financial Advancement will provide:

An annual series of five seminars conducted jointly by HomeFree-USA, and mortgage banking leaders.

The curriculum will include banking and savings basics, mortgage lending, student loan debt, homeownership, credit reports, overall financial capability, and most importantly, enriching information about mortgage industry opportunities.

Students who complete the entire series of seminars will receive a Certificate of Financial Readiness, signed by the leading sponsors.

Center partners will have access to a pool of interns and potential permanent hires, get CRA credit and tremendous branding opportunities.

The program is receiving wide applause from the financial industry.

Jeffery Schummer, vice president of Education Business Development for the MBA concludes, "Having more professionals of color in the mortgage business will grow the pipeline of homeowners of color. That's good for every single aspect of the community."


A $14 billion drain on America’s working poor: overdraft fees

August 18, 2017-A banking fee that averages $35 per transaction collectively costs America’s consumers nearly $14 billion each year. A new report from the Consumer Financial Protection Bureau (CFPB) focuses on overdraft fees and provides a profile of those hit hardest. These fees drain from the pockets of people who are already struggling to remain financially afloat.

Swift reactions to CFPB’s findings came from civil rights groups working on behalf of both Blacks and Latinos. Together, the NAACP, The Leadership Conference on Civil and Human Rights, UnidosUS (formerly NCLR), and the Center for Responsible Lending (CRL) urged the CFPB to propose regulations that would protect consumers by reining in abusive overdraft fees.

“Overdraft fees may be explained as a ‘convenience,’” said Vanita Gupta, president and CEO, The Leadership Conference on Civil and Human Rights, “but as this study shows, they only make matters worse for the consumers who can afford them the least…. Both improved disclosures and additional policy reforms are necessary if we want more consumers to succeed in the banking system.”

Similarly, Hilary Shelton, Director of the NAACP Washington Bureau and its Senior Vice President for Policy and Advocacy added, “Overdraft fees are charged largely to customers who can afford them the least -- those Americans who live paycheck to paycheck struggling to make ends meet. These fees are unreasonable and hit vulnerable consumers the hardest, thrusting them into a cycle of debt and driving some from the banking system altogether.”

An overdraft occurs when available funds in a consumer’s checking account are not enough to cover a purchase, and the bank allows the sale to go through. In return, the institution charges a fee of typically $35 per transaction that is repaid along with any overdrawn amounts from the next deposit into the account. In addition to debit cards and ATM purchases, these fees can also be generated from purchases with electronic bill payments, and paper checks.

For consumers with low and no balance cushions in their accounts, the fees can and do add up quickly, often reaching hundreds of collars for a single negative balance transaction. With direct deductions from the forthcoming deposit, banks are the first in line for repayment, jumping ahead of other expenses. As paychecks become shortchanged, consumers then risk the chance of repeated negative balances in the next monthly billing cycle.

Consumers incurring the highest number of overdraft fees, according to CFPB, have less than $350 as an average end-of-day account balance and have median credit scores of 600 or less. CFPB also found that about 20 percent of consumers with frequent overdrafts do not have a credit score and are considered ‘credit invisible’. Earlier CFPB research found that young consumers, those ages 18-25, are hit hardest by overdraft fees. Among these young consumers, over 10 percent have more than 10 overdrafts per year.

Although banks could easily decline for no fee, account transactions that lack sufficient funds CFPB’s research confirms that the practices of charging overdraft fees are a huge problem. For example, customers who frequently face overdraft fees due to debit card usage pay on average nearly $450 more in fees annually than those who do not.

Earlier independent research by the Center for Responsible Lending (CRL) has long taken issue with overdraft fees. A 2016 report entitled, Broken Banking: How Overdraft Fees Harm Consumers and Discourage Responsible Bank Products, found that many customers try desperately to avoid overdraft fees yet still find themselves stuck with harshly disproportionate fees. The research report also noted that high overdraft fees are often triggered by nominal amounts.

“For debit card point-of-sale (POS) overdrafts, which trigger more overdraft fees than any other transaction type, the median overdraft is only $20, yet the fee is $35, a penalty approaching twice the size of the actual overdraft,” states the report.

It is important to note that some financial institutions do not charge fees on debit cards. Instead, transactions that exceed available account funds are simply declined at no cost to the consumer or the bank. However, many institutions continue to charge the fees that average $35 per debit card overdraft transaction. As an increasing number of consumers use debit cards and ATMs instead of currency, the costly risk of incurring overdraft fees has also risen.

“The thought of paying high overdraft fees leads many Latinos to believe that having a bank account is too costly for them,” said Eric Rodriguez, Vice President of UnidosUS's Office of Research, Advocacy and Legislation. “By eliminating these fees we can change that perception and make banking more affordable and accessible for everyone and safer for financially vulnerable populations like low-income working class Latinos."

“This report confirms that disclosure-based rules have failed to protect vulnerable consumers from unfair practices, and that meaningful substantive reform is needed,” concluded Rebecca Borne, a CRL senior policy counsel and expert on overdraft.


Confederate Statues Fall, But Economic Racism Lingers

Cheers to New Orleans Mayor Mitch Landrieu, one of the first mayors to take Confederate statues down and to make the strong point that these statues represent nothing but oppression. You should check out the speech he delivered, in May, at

More cheers to Baltimore Mayor Catherine Pugh who had statues removed in the dead of night to avoid Charlottesville-type confrontations between racist White supremacists (also known as “good people” according to “45”) and those who oppose them. And though he does little that I agree with, in the interest of equal praise, I must lift up Maryland Governor Larry Hogan, who had the statue of Roger Taney removed from the Maryland state house. Taney was an especially vile racist who authored the Dred Scott decision in 1857. He wrote that Black people had no rights that Whites were bound to respect, and provided justification for enslavement, even as many in the rest of the nation were clamoring against the unjust institution.

As the statues are falling, economic racism is not fading. African Americans still earn just 60 percent of what Whites earn. We have just 7 percent of the wealth that Whites have. The unemployment rate for Black workers is double the unemployment rate of White workers. Even with equal incomes, Blacks find it more challenging to get mortgages or other access to capital and our economic rights are being challenged every day.

It is important to note that these statues were not erected immediately after the Civil War. Of course, Southern Confederates—a bunch of losers – were too broke to build statues. They were still trying to recover from the devastation of the Civil War. How did they plan to recover? They needed a captive labor force to work their fields, just as enslaved people had before the war. So they ensured quasi-captivity through intimidation. That need was partially responsible for the emergence of the KKK. They inspired fear, suppressed resistance, and, through Black Codes and Jim Crow, engineered the near-re-enslavement of Black people.

Black people who wanted to leave the South after the end of Reconstruction had to do it in the dead of night. Black people, who had land, were often forced to concede it or be killed. The Emergency Land Fund, a now-defunct organization that documented the Black loss of land, indicated that Black folks lost as much as 90 percent of their accumulated land by 1970, at least partially due to trickery and intimidation.

The origins of the wealth gap lie in this loss of land, and in the intimidation that kept African American people in near-slave status in the South. Confederate statues, flags, and Klan activity appeared wherever there was resistance—during and after the reconstructions, in the 1920s, after the Red Summer of 1919 and the return of Black men from World War I.

Again, we saw the rise of this activity, these statues and these flags, in the 1950s as the Civil Rights Movement pushed hard for equality. When people talk about taking “their” streets back, what they really mean is they want Black people (and other people of color) in their place; in their economic place and that place, for them, is subordinate.

So while Confederate statues are falling (not quickly enough—there are more than 700 of these odious symbols still standing), and Confederate flags are waving less frequently, the economic racism the Confederacy established is alive and well. Just ask the young Black couple redlined away from a banking opportunity, or the innocent arrested person who can’t pay bail. Ask the Black student whose loan burden is nearly twice that of her White counterpart, or the Black woman who pays more, and at a higher interest rate, for a car loan.

Sure, we have come a long way since those ugly days of enslavement or stark segregation, but some power comes from the Benjamins. And, according to some estimates, it will take more than 200 years to close the wealth gap. The statues may be falling, but economic racism is alive and well.

While I commend Republicans Lindsey Graham, Tim Scott, John McCain and so many others for condemning their president for his abject and ugly racism, I wonder if any of them would be so forceful in condemning economic racism, or in advocating for reparations. Absent their willingness to do that, they can earn style points for their remarks, but they do not seem prepared to change the harsh realities of Black life in our country today.

I challenge those who would tear down the statues and take down the flags to show equal zeal in tearing down the walls of economic racism.

Julianne Malveaux is an author, economist and founder of Economic Education. Her podcast, “It’s Personal with Dr. J” is available on iTunes. Her latest book “Are We Better Off? Race, Obama and Public Policy” is available to order at at Follow Dr. Malveaux on Twitter @drjlastword.

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