In part 1 of our lending discrimination series, we covered general details and examples of various types of lending discrimination. Here we’ll share what’s being done to prevent lending discrimination, undue damage already done in our community, and details about how you’re protected and can protect yourself.

Fair lending practices have improved greatly since the early- to mid-1900s; however, our community is still experiencing the fallout of historical inequity in lending.

For example, Oregon’s affordable housing shortage and the rising cost of living disproportionately impact communities of color. People of color are particularly vulnerable, with a higher risk of being pushed out of their neighborhoods and experiencing homelessness. Examining the root causes of discrimination and taking steps toward creating a more equitable future for all is essential in addressing these challenges.

What’s being done about lending discrimination in our region?

The Joint Task Force on Addressing Racial Disparities in Home Ownership (Task Force), created by House Bill 2007 (2021), proposes solutions—including legislation—to eliminate discrimination and other barriers the previous Task Force identified. Improving conditions, reducing barriers, and creating homeownership among people of color in Oregon are top priorities.

“We are proud to collaborate with state and community leaders to create opportunity and positive outcomes for communities of color,” said Task Force member Josephine Davis, Diversity, Equity and Inclusion Manager, OnPoint Community Credit Union. “We will keep working with partners and within our credit union to create meaningful change.”

On October 14, 2022, the Task Force voted to adopt the final report summarizing its work and recommendations to the legislative assembly. The Task Force adopted 11 recommendations, including:

• Agency support and biennial reporting
• Funding for Individual Development Accounts (IDA)
• Down Payment Assistance (DPA)
• Financial support for homeownership organizations
• Funding for education and financial literacy
• Appraiser training and education requirements
• Fair housing enforcement and awareness
• Housing supply incentives tax credit study
• Special purpose credit programs
• Incentivizing homeownership development
• Building assets through home equity

“Discriminatory lending practices are far from a thing of the past. They exist today and motivate our work to create sustainable solutions to historic inequities in our region,” said Task Force member Andrew Emerson, Vice President of Mortgage, OnPoint Community Credit Union. “We look forward to continuing to engage the local mortgage industry in eliminating barriers that prevent homeownership for people of color.”

Our community is working to address the impacts of lending discrimination. The information below will help you better understand discriminatory practices and how to protect yourself and your neighbors from discrimination.

How to protect yourself from credit and lending discrimination.

Safeguards include laws, ongoing training, testing for financial professionals, and state and federal government agency audits. However, protecting yourself from credit and lending discrimination is still essential to ensure that you receive fair and equal treatment when applying for loans, credit cards and other financial products.

Here are a few steps you can take to protect yourself:

Know your credit score.

Understand your credit score and credit report. You can dispute errors with the credit bureau if there are errors on your credit report. Knowing your credit score will also help you understand which financial products you may qualify for and the interest rates you should be offered.

Bring supporting documents.

When applying for any financial product, bring all the necessary documents, such as proof of income, employment, and other financial information. Having this information available will help prove that you qualify.

Identify red flags.

Some examples of red flags that could signal discrimination include:

• A real estate agent leads the conversation about what areas or neighborhoods are best for you.
• Your credit or loan application is denied because the gender on your application and your ID do not match.
• You have a disability, and your condo or homeowner’s association (HOA) will not allow you to make changes to your home, even at your own expense.
• You’re denied a rental or home purchase because you have an assistance animal.
• Being denied credit without being given a legal reason.
• Being charged higher interest rates or fees than other similar borrowers.

Some forms of discrimination are more challenging to uncover than others. If you feel you’re a victim of discrimination, ask around your community to better gauge what others have experienced. Documenting your experience and understanding what is and is not discriminatory is in your best interest.

Read contracts and agreements.

Ensure you understand any contract terms before you sign, including the interest rate, fees and repayment terms. A lender may not proactively share a competitor’s information for you to review, so it’s up to you to compare options.

Laws preventing lending discrimination.

The public is protected against lending discrimination by three laws; the Fair Housing Act of 1968, the Equal Credit Opportunity Act of 1974, and the Community Reinvestment Act of 1977. The intent of these fair lending laws is to prevent discrimination.

Fair Housing Act of 1968.

The Fair Housing Act of 1968 prohibits discrimination in housing sales, rental and financing based on race, color, national origin, religion, sex, marital status and disability.

This law makes it illegal for lenders to discriminate in providing mortgage loans. It also makes it unlawful to discriminate in the sale or rental of housing or to advertise housing in a manner that indicates a preference, limitation or discrimination based on these protected classes. The Fair Housing Act applies to most housing-related transactions, including mortgages, home equity loans and refinancing.

Equal Credit Opportunity Act of 1974.

The Equal Credit Opportunity Act of 1974 prohibits discrimination in credit transactions based on race, color, national origin, religion, sex, marital status, age or whether the applicant receives public assistance.

This law makes it illegal for lenders to discriminate against applicants in any aspect of a credit transaction, including in the application process, credit terms and loan servicing. It also requires lenders to provide applicants with the reasons for denying credit.

Community Reinvestment Act of 1977.

The Community Reinvestment Act of 1977 (CRA) requires banks and other financial institutions to meet the credit and lending needs of the areas where they operate, including low- and moderate-income neighborhoods, in a manner that supports sound banking practices. The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) implement the Act for their respective regulated institutions.

These laws empower consumers with the right to file a complaint if they believe they have been a victim of discrimination. They are enforced by regulatory agencies such as the Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau (CFPB).

Since a credit union’s purpose is to serve its community and it’s built into the structure of a community financial institution, the statutes of the CRA are unnecessary for credit unions.

What to do if you experience lending discrimination.

If you believe you’ve been the victim of lending discrimination, there are several steps you can take to protect your rights.

• Write a complaint letter to your financial institution. Starting at the source helps you gain information and clarity on your experience. Your financial institution is required to respond to your complaint.
• Report housing discrimination in Oregon. The Fair Housing Council of Oregon helps Oregon renters, homebuyers, housing providers, social service providers, policymakers and planners enforce fair housing laws.
• File a complaint with the attorney general’s office. You can file a complaint with the attorney general’s office so they can investigate and take appropriate action, such as filing a lawsuit against the lender.
• Submit a complaint to the Consumer Financial Protection Bureau (CFPB). The CFPB is a federal agency that provides consumers with a way to submit complaints about financial products and services, including lending discrimination. You can submit a complaint online at the CFPB’s website or by phone.

Creating more equitable outcomes for everyone in our region.

Lending discrimination is a real and persistent problem that affects people and communities in various ways. It has a long-standing impact on different groups, particularly communities of color. From higher interest rates to lower loan approval rates and decreased opportunity, lending discrimination can create significant financial barriers for borrowers. Yet, it is essential to note that there are laws in place that prohibit lending discrimination, such as the Fair Housing Act, and there are ongoing efforts to end discriminatory practices—especially in the mortgage industry.

Despite these protections, there is still much work to do. It is essential that lenders are accountable for fair lending practices and that individuals are aware of their rights and resources to address any discrimination they may experience. Understanding lending discrimination and advocating for your financial well-being is in your best interest. It’s encouraging to know that we are progressing toward a more diverse and equitable society where everyone can access fair and equal lending opportunities. Together, we can work toward creating a more just and inclusive society where everyone has fair access to housing and economic opportunities.

OnPoint has a robust Diversity, Equity, and Inclusion program that works to ensure OnPoint’s workplace and lending practices go beyond what’s required—helping us create a more equitable community inside and outside of our credit union. If you want to learn more about our community impact, you can read some of our community impact stories or download our most recent community impact report.