Bank of America’s Equity: Racial Discrimination, Elitism, Fraud, and Bad Business

Bank of America (BoA)’s newest racially discriminatory program provides a casebook study in what “equity” is really about – racial discrimination perpetrated by billionaires against poor white people to atone on the backs of others for the fact that they are very, very rich, while too few non-white people are equally rich.

Scott Shepard

Scott Shepard

In other words, making other, poorer people pay their racial-guilt debts. But given that this is BoA, one of the largest too-big-to-fail banks, this shouldn’t surprise. After all, what it means to be too-big-to-fail is that CEO Brian Moynihan and his C-suite cohort keep their winnings when BoA succeeds, but push their losses onto us much poorer taxpayers when it fails. Making other, poorer people cover their losses is pretty much the mission statement over there.

Here’s the new program: BoA is offering first-time house buyers no-money-down mortgages, but only if they buy in certainly predominantly black or Hispanic communities. Applicants seeking to buy in predominantly white communities, however poor, need not apply. Applicants will qualify without regard to their credit score so long as they can show “factors like timely rent payments and on-time utility bill, phone and auto insurance payments.”

This is astonishing and pernicious on so many levels. There is first, of course, the concern about giving mortgages to people with bad credit ratings or little savings. But it also provides a clear illustration of how white billionaires are trying to buy unnecessary absolution for their wealth by crushing poor (and, inevitably, middle class) “non-diverse” people.

To illustrate the point, consider this mortgage-application interview in Chicago between a loan officer and, shall we say, Alia Grobnik, great-granddaughter of old Slats. (Note for willfully stupid “fact-checkers:” this is satire. Note for naturally stupid “fact-checkers:” satire is humor that provides trenchant insight into underlying social or political truth.)

BoA: Good morning, ma’am. How can I help you?

A.G.: I’d like to take out a mortgage. Here’s the realtor info about the house, and I filled out your initial form.

BoA: Ah, yes. It looks lovely. Of course we’ll need to check on your credit, discuss details. How much did you intend to put down?

A.G.: Well, I’m a first-time homebuyer, so I wanted to get a no-down-payment loan.

BoA: [Pause while the loan officer looks up, frowns, looks down at the loan application.] I see. Grobnik. That’s Hispanic, then?

A.G.: No. Polish.

BoA: But your mother was Hispanic?

A.G.: No, no. Her family was Czech.

[Longer pause]

BoA: But this house you want. Is it in a black or Hispanic neighborhood?

A.G.: What?

BoA: I mean, are most of the people in the neighborhood black or Hispanic?

A.G.: Well, I don’t know. Why would I know that?

BoA: Has your family lived in that neighborhood a long time?

A.G.: Well, yes. Why?

BoA: Hmmm. OK, then, Ms. Grobnik, I’d better look that up. [Pause] I’m sorry, Ms. Grobnik. It appears to me that that neighborhood remains very Polish and Czech.

A.G.: What? Why not?

BoA: Well, you see, these no-down-payment loans only apply for mortgages on houses in predominantly black and Hispanic neighborhoods.

A.G.: Why? My neighborhood’s awfully poor.

BoA: I’m afraid it’s not diverse.

A.G.: How do you know? Have you ever been there? It’s crazy diverse. We’ve all sorts of restaurants and people – Polish, Czech, Greek, Korean, Indian …

BoA: No, Ms. Grobnik. It’s not racially diverse.

A.G.: Didn’t you just hear me?

BoA: Not racially diverse in the right ways.

A.G.: Why in the world would that matter? And isn’t it illegal for you to give loans based on race?

BoA: Anyone can apply for these loans, Ms. Grobnik. But only if they apply in qualifying neighborhoods. And in order for neighborhoods to qualify, they have to be predominantly black or Hispanic.

A.G.: Isn’t that illegal too? Isn’t the goal here to make sure this program mostly helps buyers who are not white, because they are not white?

BoA:  I am assured by our management that it is not illegal, despite that purpose. And remember, we’re trying to get poor and underprivileged people into home ownership.

A.G.: Exactly. And I’m both poor and underprivileged – and so is my neighborhood. Nobody living on what I make and living where I do has too much privilege.

BoA: Well, yes, but your neighborhood is mostly white, and white people on average are more likely to own homes than are black or Hispanic people …

A.G.: Not in my neighbor they aren’t.

BoA: … and white people on average have higher wealth and income than black or Hispanic people.

A.G.: Again, not me, and not in my neighborhood.

BoA: Those higher averages make white people privileged.

A.G.: Privileged? How? I’m just as poor as a black or Hispanic person who doesn’t own a house, makes what I do, and doesn’t have much savings.

BoA: Well, Bank of America has determined that we have to change those averages, and until we do, we have to help underprivileged, diverse communities rather than privileged, non-diverse communities.

A.G.: Well, why am I – and why are my neighbors – as poor as anyone else as poor as us, but the white averages are higher?

BoA: Because there are more very wealthy white people than diverse people.

A.G.: You mean like Brian Moynihan, the guy who runs Bank of America? Well, if he and Bank of America want to make those averages come together, is he giving away his billions to “diverse” people? That would surely help to line up the averages, right? A lot more than not letting my poor neighborhood participate in this program.

BoA: Well, yes, it certainly would. But that’s not Bank of America’s policy.

A.G.: Why not?

BoA: Well, because Mr. Moynihan sets that policy, you see.

A.G.: So his being very rich keeps the white average up, and that makes me privileged? And my neighborhood?

BoA: [Pause] Well, I suppose that’s right, Ms. Grobnik.

A.G.: And I’ll remain privileged, and not be able to get the same no-down-payment loans that blacks and Hispanics get, until all the averages are the same?

BoA: Remember, Ms. Grobnik, you could buy a home in a predominantly black and Hispanic neighborhood.

A.G.: Isn’t that called gentrification or colonialism or white supremacy or something? Doesn’t that raise all sorts of “community” anger?

BoA: I believe that is correct, Ms. Grobnik, but the opportunity is still technically available. So that makes this policy legal, see!

[Long pause. Possibly some expletives deleted.]

A.G.: Back to Moynihan. He’s going to keep all of his stuff?

BoA: Oh, I’m sure of that, Ms. Grobnik.

A.G.: If he and his fellow billionaires keep their stuff, then won’t I and other poor white people in “non-diverse” communities have to be much poorer than poor black and Hispanic people and communities in order to get the averages to work?

BoA: [Pause, then slowly]: I’m afraid that is how the math seems to work out, Ms. Grobnik.

A.G.: So for a long time I’ll be much poorer than blacks and Hispanics who can get these loans in their neighborhoods because they’re not privileged, but I won’t be able to get one to use in mine because I am privileged?

BoA: That’s right.

A.G.: And that if I try to get one by buying a house in “their” neighborhood, then I’m a white supremacist colonizer?

BoA: That does seem to be lay of the land.

A.G.: And Bank of America says this program will decrease discrimination and increase equality.

BoA: Oh no, Ms. Grobnik. Not equality… Equity.

A.G.: So equity means that I’m privileged because Brian Moynihan is very rich, and that the way to make up for Brian Moynihan being rich is to make me poorer and poorer while offering better-off non-white people opportunities that are denied to me?

BoA: It appears that way, Ms. Grobnik.

A.G.: Listen, do you have Moynihan’s address? I feel like some peaceful protesting.

BoA: Oh, no, Ms. Grobnik. You should read the papers. Because of your race – I mean, your privilege – you don’t have the peaceful-protest option. If you take any action, it will be labeled terrorism, supremacy and insurrection. Those carry long prison sentences these days.

A.G.: What? You mean I can’t even protest anymore?

BoA: Well, maybe if you protest for equity, but certainly not if you protest against it.

A.G.: So if I protest against Bank of America discriminating against me by my race in order to make me incredibly poor so that Brian Moynihan can be incredibly rich, then I’m going to jail?

BoA: I think that’s about the size of it, Ms. Grobnik. Do have a nice day, now.

With a tip of the hat to Mike Royko and his chief avatar.

Scott Shepard is a fellow at the National Center for Public Policy Research and Director of its Free Enterprise Project. This first appeared at RealClearMarkets.

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.