Assistant Attorney General Kristen Clarke Delivers Remarks at the National Fair Housing Alliance Annual Conference

Remarks as Prepared for Delivery

Good morning, and thank you for the warm introduction, Keenya. It is my pleasure to be with you all this morning to discuss the federal government’s commitment to addressing racial wealth and homeownership gaps in this country and, specifically, the unique and critical role of the Justice Department in this effort. I want to especially thank the National Fair Housing Alliance (NFHA) for its leadership on this issue and for organizing this important conference.

The Civil Rights Division is charged with securing the most basic tenets of what it means to be an American – equal opportunity and equal justice. Fundamental to the promise of equal opportunity is an equal chance to share in this country’s prosperity by building wealth through homeownership. While the laws we enforce to ensure equal opportunity in housing and lending have been in place for decades, discrimination against communities of color in housing and lending persists. Today, a white family is 70% more likely to own a home than a Black family, and the median wealth of a Black family is $24,000 compared to $188,000 for a white family. 

An especially pervasive form of discrimination that prevents communities of color from achieving homeownership is redlining. That is why, in October 2021, Attorney General Merrick Garland and I announced the Justice Department’s Combating Redlining Initiative – the department’s most aggressive, coordinated effort to address redlining to date. At that announcement, I stated that we have a duty to act because persisting racial inequality and widening wealth gaps make clear that staying the course is not enough. I also stated that bold, new action must be taken to identify and eradicate redlining and move closer to the goal of equal opportunity in our country.

I am proud to report that, through the initiative, the Civil Rights Division has attacked redlining on the broadest scale in the history of the Justice Department. In the roughly two years since the initiative’s announcement, the department has opened an unprecedented number of investigations, covering housing markets from coast to coast. These investigations have led to the department filing seven complaints and consent orders throughout the country, totaling nearly $88 million in relief to affected communities in Los Angeles, Houston, Memphis, Columbus, Philadelphia and Newark. By comparison, the division filed eight redlining cases total in the eight years of the Obama-Biden Administration. 

The relief we have obtained is bringing desperately-needed credit opportunities to communities of color all across the United States. Most of the $88 million that we have secured in relief will be dedicated to loan subsidy funds, which can be used to help prospective home buyers from affected communities with down payments and other assistance, including improvement loans, refinance options and lower interest rates. These funds will provide critical support to people living in communities of color to buy a home, keep their home or access the equity in their home, all of which are critical to reducing the racial wealth and homeowner gaps. 2023 has already been a banner year, and we are on track to build upon our successes by opening more redlining investigations and filing additional cases.

I want to highlight two redlining resolutions in particular. First, our settlement with Trident Mortgage Company, which we announced last summer in Philadelphia, included over $20 million in relief and also marked the first redlining agreement that the Justice Department has secured with a mortgage company. Mortgage companies like Trident issue the majority of mortgage loans in the United States, so their lending practices have a significant effect on the availability of credit. Our resolution in Trident sent a strong message that our initiative will hold significant players in the mortgage market accountable for their discriminatory practices. The second resolution I want to highlight is our January 2023 redlining resolution with City National Bank, which is headquartered in one of the country’s largest and most diverse cities – Los Angeles, California – it included $31 million dollars in relief, the single largest redlining settlement ever secured by the Justice Department. Not only do these resolutions underscore the significant relief we’ve obtained, they demonstrate the broad geographic reach of our enforcement efforts.

I want to take a moment to underscore the importance of a whole of government approach in addressing racial and homeownership gaps. Housing and lending discrimination have their roots in centuries of government-sponsored discrimination against communities of color, and we cannot achieve meaningful change through redlining enforcement alone. Using our authority under the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA), the Civil Rights Division works closely with its agency partners to address all forms of housing and lending discrimination that prevent equal opportunities to homeownership. We collaborate closely with all federal partners, including the Consumer Financial Protection Bureau (CFPB), the Department of Housing and Urban Development (HUD), and all financial regulators, including the Federal Housing Finance Agency (FHFA). 

One specific area I would like to highlight as an example of a whole of government approach is our work on appraisal discrimination. The Justice Department is one of 13 federal agencies on the Interagency Task Force on Property Appraisal and Valuation Equity, or PAVE, which collaborates to develop a proactive, federal response to appraisal discrimination. Last year, PAVE issued a report detailing specific agency commitments to address bias, including the department’s commitment to expand fair lending enforcement and drive accountability in the industry. Towards that end, we are actively participating in information sharing and other collaborative efforts, and we have committed to issuing a joint statement with HUD and the CFPB to educate the appraisal industry – including mortgage lenders – about federal nondiscrimination laws. We also joined the CFPB and other agencies to send letters to The Appraisal Foundation underscoring the importance of incorporating federal nondiscrimination standards into appraisal standards. I want to particularly commend FHFA for its leadership on the task force. FHFA has done critical work to better understand appraisal discrimination by leveraging the appraisal data that it collects.

We have also filed briefs in private lawsuits to clarify for courts that the Fair Housing Act and ECOA apply to the appraisal industry. For example, earlier this year, the department and the CFPB jointly filed a statement of interest in Connolly v. Lanham, a lawsuit in federal district court in Maryland relating to allegations of race-based appraisal discrimination against two African American Johns Hopkins professors, where we explained that mortgage lenders can violate the FHA and ECOA when they rely on discriminatory appraisals. In this case, the plaintiffs allege that the appraiser significantly undervalued their home at $472,000 because they are Black, and that when their home was later evaluated by a different appraiser and the plaintiffs replaced their family photos with photos borrowed from white friends and colleagues and enlisted a white colleague to pose as the homeowner, the appraisal resulted in a valuation of $750,000 – an increase of almost 60%. If you are aware of other matters where the Civil Rights Division might be able to weigh in on similar matters, I hope you will let us know.

And to that end, I want to stress the important role civil rights and fair housing organizations play in achieving racial justice in housing and lending. When we rolled out the Combating Redlining Initiative, Attorney General Garland noted specifically that our work will be informed by strong outreach to stakeholders. Since the announcement, we have amplified our outreach on redlining, from speaking at national conferences to convening roundtable discussions with local housing groups. What we have learned through our discussions is that civil rights and fair housing stakeholders have a wealth of knowledge of where housing and lending discrimination may be occurring and, importantly, what can be done.

Of particular importance of course is your work – the National Fair Housing Alliance undertakes to reduce the racial wealth and homeownership divide. From training advocates in identifying lending discrimination to ensuring that these issues are front and center of our public discourse, NFHA plays a critical role in ensuring that we all stay focused eliminating discrimination in housing and lending, root and branch.

I also want to recognize the work of all the housing advocates in the audience. You all have a front row seat to the effects of discriminatory practices on communities of color and, more than anyone headquartered in Washington, D.C., see how discrimination devastates neighborhoods and communities. I applaud you for the work you do every day to advance equality. I want you to know that you have a partner in the Justice Department. We are interested in hearing from you, and I know several of my division colleagues will be at this conference, and I encourage you to seek them out. I am confident that, working together, we can achieve equitable housing and lending marketplaces for all communities.