We’ve all seen the headlines:
Big Bank Pays $100M Settlement for Discriminatory Lending Practices
Mortgage Lenders Found Guilty of Racial Bias, Ordered to Pay Millions
Another Financial Institution Fined for Redlining
And yet, nothing seems to change.
In my conversation with Richard and Leah Rothstein, we tackled one of the biggest frustrations in real estate: Banks keep getting fined for discrimination, but they never stop doing it.
So, the real question is: How do we break this cycle?
The Problem: Fines Are Just the Cost of Doing Business
Let’s be real—when a billion-dollar bank gets fined $100 million, it’s barely a slap on the wrist.
They pay the fine, issue a half-hearted apology, and then… keep doing the same thing.
Richard put it bluntly:
“Many of these programs are trivial. They’re token efforts compared to the resources banks are obligated to put in.”
So, if financial penalties aren’t enough, what will force banks to change?
A Strategy That Works: Community Reinvestment Agreements
Leah highlighted a game-changing approach that actually holds banks accountable—the Community Reinvestment Act (CRA).
How It Works:
Under the CRA, banks are required to invest in all communities they serve—not just wealthy, predominantly white ones.
But here’s the problem:
- Banks self-report their compliance.
- Federal regulators rarely enforce strict penalties.
- Most banks receive good CRA ratings, even when they’re failing minority communities.
However, there is one moment when banks actually care about public opinion: when they want to merge with or acquire another bank.
How Advocates Can Use This to Demand Real Change
When a bank applies for a merger, regulators open a public comment period. This is when advocacy groups can:
1. Expose the bank’s history of discrimination.
2. File formal complaints about their lending practices.
3. Demand a “Community Benefits Agreement”—a legally binding contract forcing the bank to:
- Open branches in underserved communities.
- Offer more loans to Black and Latino homebuyers.
- Invest in local affordable housing initiatives.
Banks hate bad publicity, and they don’t want regulators delaying their mergers. That’s why many agree to these demands to avoid controversy.
Leah shared a powerful example:
“When a state’s realtor association pushed for special-purpose credit programs for Black and Latino homebuyers, the bank agreed—because it wanted community support for its merger.”
This strategy works—but it only happens when people organize and apply pressure.
Why Public Pressure Matters More Than Fines
Regulators might not hold banks accountable, but public outrage does.
- Banks care about their reputation.
- They care about their ability to expand.
- They care about avoiding lawsuits.
That’s why Richard and Leah emphasize that fighting housing discrimination isn’t just about legal battles—it’s about:
- Calling out banks publicly when they engage in redlining.
- Pushing cities to enforce CRA requirements.
- Demanding action during bank merger hearings.
“The only way banks will step up is if there’s public pressure,” Richard explained.
So, if you’re frustrated with the endless cycle of bank fines with no real change, here’s the takeaway:
Speak up. Get involved. Hold them accountable.
Watch the Full Conversation
Want to hear Richard and Leah’s full breakdown on bank accountability? Watch this section of our conversation here: