Bloomberg Once Blamed The End Of Redlining For The 2008 Subprime Mortgage Crisis
Redlining is a racist practice that denied services (such as mortgages, insurance, loans, and other financial services) to residents of certain areas based on their race or ethnicity. Though officially banned 50 years ago, its effects have done lasting damage to Black communities and redlining is one of the major reason for the Black-white gap in homeownership in America.
It has come to light that 2020 presidential candidate Michael Bloomberg once said while he was mayor of New York that the end of redlining was the cause of the 2008 economic collapse.
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“It all started back when there was a lot of pressure on banks to make loans to everyone,” Bloomberg said at a forum that was hosted by Georgetown University in September 2008. “Redlining, if you remember, was the term where banks took whole neighborhoods and said, ‘People in these neighborhoods are poor, they’re not going to be able to pay off their mortgages, tell your salesmen don’t go into those areas.’”
He continued: “And then Congress got involved — local elected officials, as well — and said, ‘Oh that’s not fair, these people should be able to get credit.’ And once you started pushing in that direction, banks started making more and more loans where the credit of the person buying the house wasn’t as good as you would like.”
Experts say Bloomberg, a billionaire who made his money in media and financial services, wasn’t exactly wrong in his assessment of the economic collapse, but redlining was deemed illegal and locked out Blacks from homeownership.
“It’s been well documented that the 2008 crash was caused by unethical, predatory lending that deliberately targeted communities of color,” Debra Gore-Mann, president and CEO of the Greenlining Institute, a nonprofit that works for racial and economic justice, told AP. “People of color were sold trick loans with exploding interest rates designed to push them into foreclosure. Our communities of color and low-income communities were the victims of the crash, not the cause.”
Bloomberg’s resurfaced comments about redlining as well as his former support of the police tactic of “stop-and-frisk,” comes when he is trying to woo the Black vote. In fact, he plans to launch “Mike for Black America.”