[0:00]a whole system was put in place in terms of separating individuals from access because of the color of their skin. We need to understand these things. We need to understand red lining, fair housing, poverty, wealth, disparities. We need to understand that so we can identify it.
[0:24]Red lining is alive and well, and it has had a lasting negative impact. In late October, the Justice Department announced an effort to investigate and prosecute Trustmark Bank for its treatment of black and Hispanic borrowers in Memphis, Tennessee. Red lining is this diabolical system that was developed by the federal government during the new deal, so during FDR's administration. As part of the 1930s era new deal, the government ensured mortgages for homeowners to prevent foreclosures during the depression. Color coded maps ranked loanworthiness of neighborhoods in more than 200 cities and towns across the United States. Green was super good in terms of the risk of loaning in that area. Green, or blue was okay, and then yellow was, this area's in decline, and then red was hazardous. Those red line areas were deemed credit risks because of the resident's racial demographics. Today, those so-called hazardous neighborhoods consist of lower income minority residents. The goal of red lining at the time was to make it subtle. We want to make Jim Crow. We want to make discrimination subtle. And if you really look at those policies, uh they were designed to sort of quarantine the black community. Congress passed the Fair Housing Act more than 50 years ago in 1968 to fight red lining. However, communities still suffer from racial discrimination in mortgage lending. For American families, home ownership remains the principal means of building wealth. This present-day gap in home ownership rates is larger than it was in 1960. The only thing separating the haves from the have nots is opportunity. A black family's average net worth is a fraction of a typical white household, according to American progress. Today, a white family is 30% more likely to or own a home than a black family. People don't choose to live in substandard housing. It's just what they know about, what's available, what their money's able to buy and afford. When people are denied credit simply because of their race or national origin, their ability to share in our nation's prosperity is all but eliminated. Today, the Biden administration is monitoring more modern methods of red lining. Like algorithms in the software banks use to decide whether to approve a loan. So people can recognize it, that is how we're able to eradicate its effects today. We must take bold new action if we are ever to eradicate red lining in our country. We have a duty to act now.
