Major financial institutions warned last week about controversial lending schemes bank of america It was designed to help black and Hispanic homebuyers.
Bank of America’s so-called Community Affordable Loan Solutions offer loans with no down payment or closing costs. daily wire reported last week. The bank specifically targets Black and Hispanic neighborhoods across the country and does not require participants to have a minimum credit score.
MoneyWise is a financial site that reaches millions of readers each month. warned That the program can easily “backfire”.
“Although credit scores are not always an accurate barometer of a buyer’s purchasing power or ability to pay in a timely manner, proponents believe that the interest rates needed to compensate for the low standards set by lenders are a minority. We are concerned that this could lead to failure for our buyers,” said MoneyWise. explained.
Recalling the 2008 housing crisis, the financial site noted that much of the problem was caused by banks offering risky loans to unqualified buyers.
Especially Bank of America bailed out The crisis has paid off tens of billions of dollars by American taxpayers.
The Community Affordable Loan Solution program appears to reproduce the problem, the site suggests.
“At least some of the borrowers under Bank of America’s new program are likely to be considered ‘subprime’ under normal lending rules.
Banks, on the other hand, support the program as a stepping stone for minorities.
“Our community affordable loan solutions help more Black and Hispanic families realize their dreams of sustainable home ownership. It’s part of a broader effort.” boasted AJ Barkley, Head of Neighborhood and Community Lending at Bank of America, said:
Criticism of the banking program goes beyond its function. Some online accused lenders of racist focus and seeming exclusion.
For example, commentator Steve Cortez, who also served as campaign spokesman for former President Trump, called the program racist.
“O American who happens to be white, you bailed out Bank of America (and all the other big banks) when they nearly collapsed their economy,” Cortez tweeted. did. daily wire highlighted. “Now… BofA is paying you back with a clearly race-based loan program that blatantly discriminates against whites.
lawyer Hermit Dillon The program is in compliance with the Federal Consumer Credit Protection Act of 1959 and the California It added that it could violate state Unruh laws.
Greg Wilson contributed to this report.