Fair Lending Unit created by Department of Justice

United States Assistant Attorney General, Tom Perez announced the creation of a Fair Lending Unit to be initiated within the Civil Rights Division of the Department of Justice. Mr. Perez, who runs the division, stated that the unit was created in response to the housing crisis. He further stated that lending discrimination is destructive and according to him “its discrimination with a smile and it tears communities apart.”

The unit will be handling the thirty eight know cases that are pending investigation and concern fair lending practices solely. The unit’s mission is two-fold in nature. The first mission is to hold those originating brokers accountable who practice predatory lending and second query into the depths of lending institutions that have or may have used predatory lending to deceive customers and those customers of a minority.

Predatory lending is a leading cause of the housing market meltdown. It has lead to colossal number of foreclosures in minority communities across the nation. Predatory lending is also largely reasonable for the economic crash that resulted in 2008. Economic advisors have stated that mortgage brokers and lending institutions systematically sought out to target minority communities and individuals and strapped them with loans that were toxic in nature. The loans contained high up-front fees, high interest rates and lacked common sense underwriting.

The leadership Conference is in the process of aggressively seeking Congress to create a Consumer Financial Protection Agency to centralize the existing regulation of the financial sector. Seeking to hold banks accountable for their lending practices and fill the gaps that exist in current laws that have failed.


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