Redlining - Still Evident in USA.

By

Samspon Iroabuchi Onwuka

Redlining is a term we can avoid if we chose to. It concerns the act of putting a demarcation or Red mark on certain neighborhood, where Banks and other financially regulated institutions are supposed to avoid in terms of lending. The practice goes back to FDR and the Depression era, where Red marks were legally permitted to be placed on neighborhoods that don't pay. Initially, it was an attempt to sort out the problems of default in payment in the Depression era, but soon it became a weapon in the hands of Banks to destroy neighborhoods of their choosing. By the end of 1950's, Redlining has already become a hate tool for denying blacks access to Public loans and thereby institutionalizing prices fluctuation between White and Black neighborhoods. It was a case of financial aparthied.

By 1968, such an act became highly prohibited in US following the inquiry made the US president into such affair. The issue of loan denials for Small Businesses owned by colored people has gone in years and it now involves everything, from small businesses to predatory lending and to complete denials of Government projects in area where there are lots of Blacks. By this act, neighborhoods in US may rise and fall and real estate abound in places with large default rate. Banks can cripple just about any community in US and in the world, and for that reason, US Government does its part to invest or re-invest in areas with minimum wage problem.

The larger problem is that US presidents in the last 200 years or so have always been of a certain a racial kind, many of whom from trims of the very White occur many areas of Judicial activity. This is reason why the activity of the Banks who retail out loans became so decisive. And such coming to detect this heinous act of denial become impossible since no one, who enjoys a benefit of good lending will not worry themselves about the ‘niggadly’ black neighborhoods. It does not mean that Americans were not aware of the monstrous practice, but they can look elsewhere. It is however up to the rest of us to write in vivid forms.

This practice of crippling neighborhoods through lack of appropriate funding continues today throughout America and goes a long way to explain why black and their businesses are doing so badly. In Civil societies, Banks can doom or boom any part of US if there is not enough government oversight. There is also the issue of good businesses in these areas, which can useful in determining the rate of payment in several Nigerian society.

The monstrous consequence of Redlining so evident in many parts of the State of New York is a microcosm of what is happening throughout US, and in many parts of the world such India, Japan, korea, and China. Houses in Major Cities across the US faced all kinds of foreclosures by the end of last July 30th 2010. These Cities included the following (1) Las Vegas (2) Merced California (3) El Centro California (4) Port of Lucia, Florida (5) Fort Myers, Florida (6) Bend, Oregon (7) Ocala, Florida (8) Detroit, Michigan (9) Rockford, Illinois (10) Toledo, Ohio, among many others. These Cities have serious default rate going by April this year from a report by Luke Mullins of USnew.com. But as July 30th the fears were proven true by the default of houses in many Cities across America.

Analysts were quick to point out that these Cities were among the worst economically hit during the collapse of world economy. That the cities had little or no improvement in terms of employment since 2008, that much of the money given to bail out many of these banks and corporation in US went into all kinds of routine process, and therefore, these cities would not escaped long list of default in terms of Housing.

In fact, part of the allegation of many Banks during the American Depression era of the 30’s is that much of their money was stuck in poor ghettos in America, especially among the so called Black society. As much as these Bankers can make such comments without challenge, it must be remember that these poor African American societies held falsely responsible for 100’s of billions of dollars, trapped in bad debt, are worth only so much and that people should not forgot so easily that much of US African American Business communities are worth only so much. The bankruptcy of many big corporations even drove the rest of the world to trillions of US dollars worth of losses, and some people estimated at some point that the losses were up to 20 trillion dollars.

The point must include the very meddling comments in February 2010 by Hans-Olaf Henkel from Germany that the reason for world economic collapse was due to Bank of America lending to minorities and to blacks. This of course could not really be the case given the European strangling of much of the loans from America in the depression era and in the latest economic downfall in 2008. The role that Europe played in bringing down Lehman and other Banks has not been that discussed. Therefore such allegations about underperforming or nonperforming loans among Blacks or African Americans are incorrect.

The issue is so worrying that when many Nigerians of recent memory who are indiscriminatingly accused of swindle, must be advised that they should see such attack as a form of labeling and social stigma, that go back to business relationship between Europe, American, and Africans who will become African Americans, and the refusal to build these neighborhoods for other demonstration of race safety.

But this issue of nonpayment is false and so wrong that addressing the incredulous damages of years of business relationship. This stigma in financing is so severe that even Indians and others Asians in any business of the world will nowadays seethes with the same measure on these Africans.

Redlining which go back to Franklin Delano Roosevelt and the New Deal came to be recognized as a form protective device against certain neighborhoods.

In the circumstance, there is nothing to describe the incident than what we find in the very city of Detroit, where House prices has fallen beyond redemption, yet Blacks can’t pay. In US cities such as Detroit, there has always been the issue of Home foreclosures among African American communities going back to ages, not to mention that much of Detroit has been strategically reduced to ghettos in the past four decades by Banks and Insurance companies. These financial institutions forced good neighborhoods in Detroit into steady decline, and as a consequence, these neighborhoods became drug invested.

Detroit in recent times has begun to file claims and allegations about the denials of loans to many blacks, citing instances of objective refusal to lend and to refinance houses in many neighborhoods. And they were variously awarded certain due to help neighborhoods recover.

Detroit is not an isolated incident, in many parts of US with huge presence of African American and Hispanic populations, the issue of on time payment and default has always been the case. There are all kinds of investigative study done about Detroit case but all study lead to the same conclusion that Banks do not lend to minorities because Blacks and the so called minority will not pay back the loans.

The idea of institutional discrimination which privately and publicly harmed much of the black population is discounted that what we find in places like India, China, Japan, and in many Arab countries is not to be missed as a mirror image of what happens in inner American societies. For that reason, many Insurance companies and Banks exercise the faulted due process of denial of loans and provision of Insurance.

On the surface, there is nothing particularly wrong with the down spiral of these rates and businesses in many parts of US. It’s probably a kind of rotation that takes place every now and then, in Major US real estate markets.

But these cities contain other reasons why they are performing at such low ebb. Much of that reason has to do with the dominant population of Blacks and African Americans in these places.

Just a few months ago, Pennsylvania Human Relations Commission received complains about discrimination in the wake of Housing crisis. Their prizing for neglect, go the distance of demonstrating what we find in many isolated housing areas of Philadelphia, but not just in Housing but in small business which are the roots of major societies in the world.

Philadelphia’ Board of Pension & Retirement and other active groups were also involved in that respect of claim, and the allegations. But this kind of Reverse Redlining becomes the only way out if the US Government would still ignore the side effects of dealing with Banks and Insurance Companies who will apply all kinds of measurements to deny certain neighborhoods loans for other reasons besides loans. Many of these banks can cripple neighborhoods in order to make them cheap and then force a default on the loans, and from such defaults, these Blacks lose their homes.

The problem is sometimes finding the real culprits since many of them hide under various shades in loan practice, as such the very bail of banks explain just how badly these financial institutions have become in many years since parts of a place like New York awarded 8.2 billion dollars, has not received that major boost in terms of small businesses.

But need must be maintained on the very issue of Reverse Redlining since many of these neighborhoods in US are not that different from what is happening to black businesses in US and in many parts of the world. But the US Fair Housing Act of 1968, the Disclosure Act of 1975, and Community Re-investment Act of 1977, all emerged from requirement of US President’s National Advisory Panel on Insurance in Riots Affected Areas of 1968. The difficulty with such laws is actually getting to the culprits, since many of these Banks and corporation will deny you the access to relevant information and the rest of them will need forensic accountants to get to them.

But using parameters in terms of Hedge funding and funding activities of the market, we can exploit better holes in the whole question since many of these institutionalized lending societies, can only be possible through certain indexing, which reflect all kinds of activity in wilder world of lending, a form of pool where Banks and Insurance companies themselves cannot essentially hide from.

Using indexes such as Credit Suisse First Boston, Hedge Fund Research-HFR, Hennessey Group, Standard and Poor's S&P, and probably the Hedge index from Center for 'International Securities and Derivatives Markets' and other managed account Report over a given number of years - given the record of number of IPOs at all stock exchanges in the US, there is a possibility we can arrive at the conclusion. It is possible to illustrate how neglected the African American businesses and societies have been participations in the larger economy has completely become. The gap is that monstrous, so monstrous that the word ‘African American’ in American business and in Hedge Funds is almost nonexistent.

This idea of profiling - artificially racial among other sorts - is so serious in New York that Banks, regardless of what they preach are willing to employ anyone, even especially Asians and Asian Americans of certain stock, that never lend to you as African American. Except for occasional scattered few who may go that route of American lending practice, such exercise do not exist at all. But threat is a very rare treat and many of those lenders are leading at the ropes end.

If no one is willing to take the blame for the use and abuse of lending in New York, then attention should be made to those who represent the Federal Banking Acts in New York and other Federal Reserves on the ground. Such persons will include the former Federal Reserve secretary of Bank of America, Timothy Geithner, who is now the US secretary of Treasury, and former Associate of Federal Housing Authority, Andrew Cuomo, who is the so-called New York State attorney General. It is difficult to clarify how such acts could actually take place in a State where much of the citizens are seriously struggling to earn a living and how it could go unnoticed for many decades.

Today's society of learners, especially among the African American who feel seriously disfranchised from everything, including Public Television and Television Rights, are not even concerned with the problem of the 'Redlining' and other loan malpractices in US and in New York. For several reasons, much more should be done to make public the facts that the monstrous practice of the last century leading to civil rights era is still a very present and threatening danger to American Urban life.

African Americans society and market is no more different from other world emerging economy which gravitate Billions of dollars every day, and if enough attention is given to the African American market, there is a tendency to believe that America would likely be better off than much of its current performance. That this view is seriously mistaken as side effect of capitalism might have deceived the world into thinking that investigative inquiry into banking activities by third parties should not be taken serious.