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NAACP’s Anti-predatory Mortgage & Payday Lending Practices

WHEREAS, wealth is critical to a family's economic stability and security, and the wealth of the African-American community is threatened by abusive predatory mortgage and payday lending practices; and

WHEREAS, today, African-American families still lag far behind white American families in terms of net worth with studies indicating that the average African-American family has net worth of only $5,988 which is less than 7% of the wealth of whites; and

WHEREAS, among African-American households that owned a home in 2002, one-half had 88.1% of their total net worth in the form of home equity, effectively making such home equity the only savings account that most African-American families have; and

WHEREAS, African-Americans are twenty-five percent behind white Americans in terms of homeownership, 47.7% versus 74.3%, and this difference is contributing significantly to the wealth divide; and

WHEREAS, home ownership is one of the most effective means to build wealth and keep families out of poverty, we must undertake efforts to assure home ownership in the African-American community is not threatened by the abusive practices of predatory mortgage lenders or thwarted by the cycle of poverty caused by payday lending practices as well as abusive automotive lending.

NOW, THEREFORE BE IT RESOLVED, that the NAACP reaffirms its 2002 policy on predatory & payday lending practices at its 96th Annual Convention; and

BE IT FURTHER RESOLVED, that the NAACP is against all forms of abusive lending practices that force African-Americans to operate in a two-tiered, separate-and-unequal financial services system and instead seeks to promote responsible solutions that address the real pain caused to the African-American community by predatory lending; and

BE IT FURTHER RESOLVED, that in promoting such solutions the NAACP will only support legislation on predatory mortgage lending that: 1) addresses the manner in which predatory mortgage lending strips wealth from African-Americans; 2) provides meaningful solutions to end the following equity stripping practices: mandatory arbitration, exorbitant points and fees such as abusive prepayment penalties and yield spread premiums, flipping, steering, and financing excessive points and fees; and 3) allows states to continue to protect their citizens from such egregious practices; and

BE IT FURTHER RESOLVED, that the NAACP demand that severe sanctions, to include fines, restitution and incarceration, must be included in any legislation and/or regulation that is presented and/or proposed; and

BE IT FURTHER RESOLVED, that the NAACP, cognizant of the cycle of poverty caused by payday lending and the barrier it poses to asset building and home ownership, is adamantly opposed to payday lending in all forms and calls on all banks to end their affiliation with abusive payday lenders; and

BE IT FINALLY RESOLVED, that the NAACP also calls on all national, state and local banks that provide services to sub-prime lenders, mortgage brokers, appraisers, title companies and the Federal Deposit Insurance Corporation to affirmatively support state efforts to effectively end abusive predatory and payday lending practices.