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For Black homeowners in LA, the City National settlement is just a start

AILSA CHANG, HOST:

A history-making settlement addresses a small piece of the racism that has afflicted the home financing system in this country for generations. The Justice Department is ordering City National Bank to pay $31 million over accusations of redlining in Los Angeles. DOJ says the bank avoided underwriting mortgages in LA's majority Black and Latino neighborhoods between 2017 and 2020.

Now, here to talk about what this settlement means for LA County is Mark Alston from the National Association of Real Estate Brokers, which advocates for Black real estate professionals and communities. Welcome.

MARK ALSTON: Thank you. It's good to be here.

CHANG: Good to have you. OK. So, Mark, when you first heard about this settlement, I'm just curious, what went through your mind?

ALSTON: It was a surprise to me. Thirty-one million sounds like a lot individually, but for the county of LA, 10 million people, it's a low number.

CHANG: Well, I was just going to ask you about the number because this has been touted as the largest settlement ever between the federal government and a bank over redlining, practices that still continued even after they were outlawed in the late 1960s. So when you think about the massive loss of generational wealth that has resulted for people of color because of redlining, even in just LA alone, how does $31 million stack up to you?

ALSTON: Eight hundred and forty-four thousand Black residents in LA County, maybe 300,000 households - City National Bank's founded in 1954. This is only from 2017 to 2020. They weren't redlining before. This doesn't sound like a lot.

CHANG: Yeah. Well, we should note that City National Bank says it disagrees with the Justice Department's allegations but that it still does support efforts to ensure equal credit access for everyone. We talked to you back in 2021 for our series on Black homeownership in America, and you took us through a lot of the barriers that prevent so many Black people in this country from even owning a home beyond getting rejected for a bank loan. Can you just refresh us with a couple examples?

ALSTON: You know, if you're going to talk about equal opportunity and equal access, then you have to have equal pay. When the average Black family is worth $3,600 and an average white family is worth $147,000 and then you design a housing financial system based on down payment and debt ratios, then you've designed a disparate system that disparages Black families. Whether it's by law or by tradition, there's opposition to Black homeownership, and it's reflected in the numbers. It's not because Black people want to be tenants. We want ownership just like everybody else. And the mark of success in our community is homeownership.

CHANG: Right. A lot of this money is going to go to a loan subsidy fund with a small amount going to advertising and financial education in the communities that were impacted by this bank's practices. Now, if you could decide where this settlement money is going, this $31 million, I'm just curious, Mark, where would you put that money?

ALSTON: Well, easy for me - down payment and closing costs assistance as well as interest rate buydown. There's 500,000 for advertising - that's important to let the community know what is available. Five hundred thousand for consumer financial education - it depends how it's set up. Our ancestors bought property, signed the deed with an X, paid it off and passed it down. Financial literacy is important, but intent and priority is even more important.

CHANG: Do you expect more lawsuits like this, even bigger settlements to come?

ALSTON: Let's not even talk about lawsuits. Let's talk about changed behavior. If they make it a problem to conduct these actions, then hopefully the lawsuits will continue, but the behavior will outpace the lawsuits. But we'd like to have success, a change in attitude, a change in opportunity to have the American dream be available to all Americans, regardless of what you look like or where you came from.

CHANG: Mark Alston of the National Association of Real Estate Brokers, thank you very much for joining us again.

ALSTON: It's my pleasure. Transcript provided by NPR, Copyright NPR.

Ailsa Chang is an award-winning journalist who hosts All Things Considered along with Ari Shapiro, Audie Cornish, and Mary Louise Kelly. She landed in public radio after practicing law for a few years.
Lauren Hodges is an associate producer for All Things Considered. She joined the show in 2018 after seven years in the NPR newsroom as a producer and editor. She doesn't mind that you used her pens, she just likes them a certain way and asks that you put them back the way you found them, thanks. Despite years working on interviews with notable politicians, public figures, and celebrities for NPR, Hodges completely lost her cool when she heard RuPaul's voice and was told to sit quietly in a corner during the rest of the interview. She promises to do better next time.
Ashley Brown is a senior editor for All Things Considered.