How to Start Closing the Racial Wealth Gap


I have an article out in The American Prospect about How to Start Closing the Racial Wealth Gap. Unlike a lot of writing bemoaning the racial wealth gap, this piece has a concrete reform that could be undertaken on day 1 of a Biden administration without any need for legislation or even notice-and-comment rulemaking. The article  points the disparate impact of an obscure, but enormous indirect fee on mortgage borrowers that the Federal Housing Finance Agency has required Fannie Mae and Freddie Mac to charge since 2007. The fee is structured in a way that disadvantages borrowers with fewer resources and lower credit scores, which has a disparate impact on borrowers of color. (I'm not saying it's an ECOA violation--that's a different analytical matter.) The fee was adopted in response to a competitive environment in 2007 that doesn't exist today; there's really no good reason for the fee to exist any more.