Discriminatory Sub-prime and Predatory Lending Practices

WHEREAS, sub-prime lending, where loans are extended to people with impaired credit, is a growing segment of the mortgage market; and

WHEREAS, sub-prime loans serve a function; the objective of the financial institutions should be to help applicants rehabilitate their credit, not to expand the sub-prime market; and

WHEREAS, such loans are increasingly targeted to African Americans, elderly and female heads of households; and

WHEREAS, such loans are characterized by high interest rates, excessive and unnecessary fees and costs, balloon payments, pre-payment penalties, unnecessary costs for credit life, accident or health insurance, and repeated re-financing or "flipping" of the loan; and

WHEREAS, discriminatory and predatory lending practices are widespread throughout neighborhoods of color and serve to deny people of color access to mainstream credit; and

WHEREAS, credit discrimination and predatory lending practices destroy the financial well-being of its victims, as well as the financial well-being of the entire community.

BE IT RESOLVED that the National Association for the Advancement of Colored People stands opposed to the discriminatory practices associated with sub-prime and predatory lending in the United States of America and will work through the local, state and federal legislative process to make sure that such practices will be prohibited; and

THEREFORE, BE IT FINALLY RESOLVED that the NAACP will urge all of its Units to work to identify and assist victims of predatory lending practices, following NAACP procedures, and take action necessary to expose and halt those who engage in discriminatory and unfair lending and credit practices in our communities.