Friday, April 30, 2010

Terms of the NAACP's Agreement with Wells Fargo

 

From Dr. Boyce Watkins, Syracuse University

In light of the article I wrote challenging the partnership between the NAACP and Wells Fargo, the company accused of predatory lending in the Black community (click here to read the article), I thought I'd publicly share the NAACP lending principles that were sent to me by one of the NAACP spokes people.   In spite of the fact that I am not accusing the NAACP of illegal or unethical behavior, I still hold to the fact that the following must be true in order for me to become comfortable with this partnership:

1) There should be public accountability and transparency regarding the nature of the deal between the NAACP and Wells Fargo.  That includes the amount of the sponsorship and all WRITTEN contractual commitments between the NAACP and Wells Fargo.  Only specific terms in writing are relevant and can be properly enforced.

2) Simply agreeing to stop predatory lending is not enough, since there must be compensation given to the African-American community for tens of billions of dollars in lost wealth due to the racially discriminatory practices of Wells Fargo.  If a senior citizen on the South Side of Chicago who lost her home is not given relief from her situation, then this partnership does very little for our community.  A person cannot simply apologize for a crime and refuse to commit the crime again; there must be an effort to make right on the crimes that have been committed in the past.

The NAACP Banking Principles on Fairness in Lending are Below:

 

Mortgage foreclosures, excessive subprime mortgage interest rates, and hindered access to prime mortgage loans have had an inordinate impact on people of color and other historically disadvantaged borrowers. These practices have resulted in adverse effects even beyond the actual borrowers themselves. Home values have been depressed as a result of these practices, and in general people of color and their families have become increasingly vulnerable to loss of shelter, home security, equity, and wealth—even if they do not have subprime loans. To encourage transparency and fairness in the processes associated with obtaining quality loans and improved relationships between financial institutions and people of color and other historically disadvantaged borrowers, the NAACP has developed the following principles.

1. Loan terms will not be determined by a borrower’s race, ethnicity, gender, national origin, sexual orientation, language preference, disability, religion/creed, or age, except as otherwise permitted or required by law. Additionally, loan terms will not be determined by factors designed to serve as proxies (e.g., zip codes) for the above categories. Loan terms will not be determined by subjective underwriting without controls to prevent inappropriate bias or discrimination. Similarly situated borrowers (i.e., borrowers with similar underwriting characteristics, including credit scores, debt ratios, loan-to-value ratios, etc.) will receive comparable loan terms on identical or comparable loan products.

2. Every borrower will have the option of selecting a loan product that is appropriate for his or her circumstances. Borrowers will first be presented with loan product choices that are consistent with their financial circumstances. Lenders will determine whether borrowers are eligible for prime loan products and, if so, the borrowers will be presented with prime product options. Additionally, information will be provided to the borrowers about available conventional and Federal Housing Administration (FHA) loan products in order for the borrowers to fully understand their options. Borrowers with good payment histories and demonstrated improvement in credit performance and other risk factors will be considered by their existing lenders for loan refinancing that result in improved loan terms.

3. Institutions will seek to eliminate policies or practices that encourage biased and exploitive behaviors toward borrowers. Lending institutions will disclose in good faith the loan fees associated with each loan and will conduct periodic audits of files, policies, and practices to ensure an environment—in lending, credit, and payment options—that is free of bias toward borrowers. Additionally, lenders who sell loans on the secondary market to third parties will also observe these fairness principles and will refrain from charging usurious interest rates.

4. Borrowers will be approved only for loans they have a current ability to repay. Borrowers will receive loans that they demonstrate the ability to repay, even in the event of a rate increase. Adjustable rate mortgages (ARMs) and other loans will not be underwritten at the “teaser rate,” but rather at the fully indexed interest rate. Standard adjustable rate loan products will be clearly identified as such to borrowers, so they are fully aware of the terms of the ARM loan products and the possibility of interest rate and payment increases.

5. Each policy may be maintained and monitored for its racial impact. Fairness is measured not only in terms of intent, but also impact. Policies will reflect a demonstrated effort to ameliorate negative outcomes based on race or ethnicity. Each institution will have internal controls to determine overall, and within the subprime community of loans issued by the institution, that its neutral practices do not have an unlawful adverse impact based on grounds of race, sex, color, or ethnicity.

6. All borrowers will have access to free information, online and in print, that will help them understand and improve the quality of their loans. The terms of each loan will be provided to the borrower and explained in plain and simple language. The terms of the loan will be in a large font and easily legible to those who are not severely vision-impaired. If the borrower is fluent in Spanish but not English, the loan disclosures and documents will be translated. In the case of other languages, borrowers without access to loan translation expertise will be referred to phone-based or other translation services that are familiar with loan terms and conditions. All borrowers should be able to clearly understand the terms of their loan products.

7. Lenders will work with borrowers to prevent foreclosures. Loan servicers will consider foreclosure to be the “last resort” and will explore all appropriate alternatives before completing a foreclosure sale. Because these matters impact borrowers, their neighbors, and the institution, we believe it wise for the institution to engage in extended good-faith efforts to do all that it can to prevent foreclosures. Lenders and their affiliates will not operate using a business model intentionally designed to profit from a foreclosure.

8. Lending institutions will support and implement the inclusion of diverse suppliers in their contracting and partnership decisions. Financial institutions will establish aspirational and measurable goals and develop supplier programs that ensure the inclusion of businesses owned by women- and people of color wherever contracting and partnership opportunities present themselves. Goals will be, at the very least, to reflect the various racial, ethnic, and gender compositions of the general population.

9. Workforce diversity is important to fair decision making and expanded opportunity for economic development. From the boardroom to the cubicle, the workforce continuum will reflect the diversity of the nation. As financial institutions establish inclusive business policies, so too will there be a measurable effort to employ a workforce that is reflective of the growing diversity of the nation—at all decision-making levels within the institution.




Friday, April 23, 2010

Dr. Boyce Discusses Problems with Henry Louis Gates' Analysis

Henry Louis Gates gets slavery's history all wrong

by Dr. Boyce Watkins

Harvard Professor Henry Louis Gates Jr. recently wrote an interesting piece for the New York Times called, "Ending the Slavery Blame Game." In the piece, Gates effectively argues that the fight for reparations is convoluted and somewhat mitigated by the fact that African elites participated in the slave trade. While describing complex business deals made between some African leadership and the Europeans who brought Africans to the New World, it almost appears as though Gates is saying that this disturbing relationship somehow undermines the right of African-Americans to hold our government accountable for its involvement in crimes committed against our people.

At very least, I am under the assumption that by "ending the slavery blame game," Gates is arguing that we should stop blaming the United States government and white America for the rape, murder, castration, lynching and beating of our ancestors.

Sorry Dr. Gates, but I must respectfully (or perhaps not so respectfully) disagree. If a young girl is sold into prostitution by her own parents, the pimp must still pay for the suffering he caused the young woman. He can't simply say, "Her parents made a deal with me, so you should stop the blame game."

In other words, the United States, as a broad and powerful industrial entity, benefited from slavery to the tune of several trillion dollars. Much of this wealth was passed down from one white man to another, and was always out of the grasp of the black men, women and children who gave their lives on American soil in order to earn it. As a result, the median net worth of the African-American family is roughly one-tenth that of white American families and we have consistently higher unemployment due to our inability to create jobs, since white Americans own most businesses. These facts hold true without regard to how the African-American holocaust started in the first place. They also hold true because wealth and power are commodities that are passed down inter-generationally, and we missed out on all of this because we were slaves. What occurred after we left Africa can and must be considered independently from what happened while our forefathers were in the mother land.

 

 

Click to read




Monday, April 19, 2010

Dr. Boyce Watkins: Resident Scholar - AOL Black Voices

 

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Harvard's Charles Ogletree Describes Sharpton's Link to Obama

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The Black Agenda: Wealth-Building Must Top the List - Dr. Boyce Money

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Officer Charged With Beating a Motorist

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Financial Lovemaking: Tiger, Tiki and the High Cost of Cheating

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Jay-Z Sues Red Sox Slugger David Ortiz Over 40/40 Club Name

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Bill O'Reilly Gets Booed at Sharpton's National Convention

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President Obama Spends $18 Billion on Jobless Benefits

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Police May Have Coerced Boys to Confess to Gang Rape of 7-Year-Old

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Former NAACP President Benjamin Hooks Dead at 85

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Man With HIV Knowingly Infected Women, Set to Be Released From Prison

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Kennedy Family Member Staying in Prison on Murder Conviction

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Mississippi Gov. Says Slavery Conversation is Not Important

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NBA Star Derrick Coleman is Now Broke: $87 Million Up in Smoke

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Michael Steele Tries to Explain Himself to Other Republicans

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Suspects Found in Slaying of Newlywed Couple




Wednesday, April 7, 2010

Dr. Boyce Watkins: Black Men Aren't Graduating from College

 

blackmalegraduation

by Dr. Boyce Watkins, Syracuse University


Last week, the American Council on Education issued a report on the state of black males in the higher education system.  The report reveals some interesting and disturbing trends.  It turns out that black men are graduating from college at a rate which lags significantly behind other ethnic groups. When determining graduation probabilities over a six-year period, black males were found to have a graduation rate of 35 percent.   This compares with rates of 59 percent, 46 percent and 45 percent for white males, hispanic males and black women, respectively.  In other words, black men are a little more than half as likely to finish college when compared to their white male counterparts.

I have been a black man for my entire life now, and I’ve taught at the college level for the past 17 years.  So, perhaps I can shed some light on the nature of these problems and how we might work to solve them.  Some of the factors are institutional and some are cultural, so prepare to be offended by at least one of the things I have to say:

RELATED: Why Aren’t Minorities Graduating From College?

1) Most American universities refuse to hire or retain African American professors, including many HBCUs: If your professors look like you, you are more likely to relate to that individual and enjoy the class.  When I went to The University of Kentucky, Indiana University and The Ohio State University (where I earned my PhD), I didn’t see one single professor who looked like me (and I took A LOT of classes).  This made for an incredibly awkward and damn near traumatic educational experience.  When I first noticed institutions like Morehouse College presenting images of black males in the front of the classroom, I was envious after realizing what I’d been missing.  Rather than finding excuses for firing or not hiring black professors, most universities would be well-advised to stop lying to themselves and become serious about diversity.  Yes, black professors are out there to hire if you are looking for them, but many academic departments find a reason to believe that they are not qualified.  Just look at the experiences of myself, Cornell West and Michael Eric Dyson as cases in point.  Each of us has received significant resistance in our careers because our work is connected to the black community. Our stories are just the tip of the iceberg, since there are thousands of black professors who’ve gone through the exact same experience when dealing with the entrenched racism of academia.  Many HBCUs are not immune to this trend, as most of them don’t have very many African American professors (Don’t believe me?  Go to the Computer Science Department or Business School at any random HBCU and count the number of African American professors).

 

Click to read