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Legislation
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In the United States, the Fair Housing Act of 1968 was passed to fight the practice of redlining. According to the Department of Housing and Urban Development, "The Fair Housing Act makes it unlawful to discriminate in the terms, conditions, or privileges of sale of a dwelling because of race or national origin. The Act also makes it unlawful for any person or other entity whose business includes residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race or national origin."[1] The Office of Fair Housing and Equal Opportunity was tasked with administering and enforcing this law.
The Equal Credit Opportunity Act (ECOA) is a United States law (codified at 15 U.S.C. § 1691 et seq.), enacted 28 October 1974,[citation needed] that makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract);[citation needed] to the fact that all or part of the applicant's income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The law applies to any person who, in the ordinary course of business, regularly participates in a credit decision,[citation needed] including banks, retailers, bankcard companies, finance companies, and credit unions.
The part of the law that defines its authority and scope is known as Regulation B,[citation needed] from the (b) that appears in Title 12 part 1002's official identifier: 12 C.F.R. § 1002.1(b) (2017).[citation needed] Failure to comply with Regulation B can subject a financial institution to civil liability for actual and punitive damages in individual or class actions. Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1% of the creditor's net worth in class actions.[citation needed]
The Community Reinvestment Act, passed by Congress in 1977 required banks to apply the same lending criteria in all communities.[2]
- ^ "HUDNo_15-064". portal.hud.gov. Archived from the original on 2017-03-08. Retrieved 2017-03-08.
- ^ Paul S. Grogan; Tony Proscio (2002). Comeback Cities: A Blueprint for Urban Neighborhood Revival. Basic Books. p. 114. ISBN 978-0-8133-3952-8.
The goal was not to relax lending restrictions but rather to get banks to apply the same criteria to residents in the inner-city as in the suburbs.
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