This Week in ESG and Impact Investing

The U.S. Department of Justice (DOJ) recently announced legal actions aimed at addressing discriminatory lending practices, documenting systemic racism in the financial services industry. The cases highlight DOJ’s efforts: a $6.5 million settlement with Citadel Federal Credit Union for redlining Black and Hispanic communities, and a lawsuit against Rocket Mortgage , an appraisal management company, and an appraiser for racial discrimination in a mortgage refinance application. These cases underline a painful truth: redlining and racial discrimination in housing and mortgage lending persist, reinforcing racial wealth disparities and undermining the economic potential of minority communities. The Citadel Federal Credit Union Case In the first case, the settlement with Citadel Federal Credit Union reveals a stark reality. Despite decades of laws intended to prevent it, redlining—a practice in which lenders systematically deny or limit financial services to communities of color—remains ...

The history of the United States is a complex tapestry woven with contrasting threads, some bright, others mournful and grotesque. The Tulsa Race Massacre of 1921 represents one of the worst chapters in American history. It's a story we must confront today as a stark reminder of the long and challenging journey towards racial equality. Greenwood, known as "Black Wall Street," was a thriving Black and Native American community that had defied the odds by accumulating wealth through early 20th-century oil discoveries in Oklahoma. The resilience and prosperity of this community proved to be a thorn in the side of white residents who resented the growing Black wealth. This resentment laid the groundwork for the tragic events of May 31 and June 1, 1921. The Tulsa Massacre left over 35 blocks of the city in ruins, more than 1,200 homes destroyed, and an estimated 300 people dead, most of them Black. Ten thousand people were left homeless. The events of 1921 in Tulsa aren't ...

The Department of Justice announced a settlement with City National Bank of Los Angeles for "refusing  to underwrite mortgages in predominantly Black and Latino communities."  The $31 million dollar settlement requires the bank to:  Invest at least $29.5 million in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods in Los Angeles County. (We note our work on an investment vehicle that deals with homelessness and another that deals with HIV/AIDS. See: https://www.impactinvesting.online/2018/11/william-michael-cunningham-on-impact.html  and The opening of Brenda House Women's Shelter https://www.prlog.org/12708015-william-michael-cunningham-to-speak-at-the-opening-of-brenda-house-womens-shelter.html );  Spend at least $500,000 for advertising and outreach targeted toward the residents of these neighborhoods;  Spend at least $500,000 for a consumer financial education program to help increase access to credit for residents;  Sp...

"Redlining" is a practice by financial institutions and others in which loans and services are denied and withheld from residents of Black and minority neighborhoods. The discriminatory institutions use the excuse that these areas are "hazardous to investment," a self fulfilling premise responsible for significant macroeconomic damage, as shown in the charts below: and  Consider the case of Lakeland Bancorp, a $10 billion (assets) banking organization located in New Jersey.  The US Department of Justice appeared to have sued Lakeland for redlining on 9/28/22. What actually happened is that DOJ settled with the bank on 9/27 and sued (filed the complaint) on 9/28. In other words, they settled with the bank before they sued, and changed the filing dates so that it appeared they sued and settled on the same day. We filed an objection to the settlement,  based on: 1. Lakeland reported net income of $331,678,000 from Fiscal year (FY) 2018 to the second quarter of FY 202...

According to an official assessment obtained by Foreign Policy Magazine, the US government has declared “black identity extremists” like the "Black Lives Matter" movement a violent threat to the country. This assessment was made by the FBI’s counter-terrorism division. The finding, which carries with it the authority of a major counterterrorism arm of the United States, authorizes agencies of the Federal Government to use extraordinary means to protect the country from this erroneously declared threat. This might include spying on, rounding up, or forcibly detaining BLM activists and their supporters. History has shown what this means. COINTELPRO, "a series of covert, and often illegal, projects, starting in 1956 and conducted by the United States Federal Bureau of Investigation (FBI), aimed at surveilling, infiltrating, discrediting, and disrupting American political organizations." FBI records show that COINTELPRO resources targeted groups and individuals ...