Forging Democracy: The Connection Between the Current Mortgage Industry and Postbellum Virginia

Abstract

An essential element of the American dream is owning a home in the neighborhood of one’s choice. But what happens when banks discriminate against minorities and consequently undermine fair mortgage lending laws? The implications cannot be understated: by denying minority families mortgage credit, the financial industry is essentially denying them the opportunity to accumulate household wealth. However, mortgage lenders are intentionally (and in other cases unintentionally) discriminating against blacks and Hispanics — a prominent issue that undermines past fair lending statutes and threatens democracy within the United States. Unfortunately, though, this is not the first time in American history where the law has been loopholed. In the same way racist county judges subverted postbellum legislation by excluding black citizens from jury pools in postbellum Virginia, mortgage lending firms are deliberately undermining fair lending laws by targeting minority communities and manipulating the process so that minorities end up with high-cost loans; however, even among well-intended, color-blind organizations who do not pursue this predatory lending strategy, minority customers may not be receiving equal treatment, ultimately demonstrating that anti-discrimination laws can become Madisonian parchment barriers regardless of the intent of the institutions that perpetrate the discrimination.