Few Safety Nets for Women of Color

UNITED NATIONS - As hundreds of activists from around the world descend on the United Nations Monday for a major two-week meeting on women's rights and equality, the economic crisis here in the host country is continuing to have an especially heavy toll on women of colour.

African American women were disproportionately impacted by the subprime and housing crisis in the United States that triggered the longer-term global meltdown, and they continue to be marginalised in the ever more precarious U.S. job market.

According to the Bureau of Labour Statistics, African-American women hold just 5.2 percent of jobs in management, professional and related occupations (compared to their 6.2 percent share of the U.S. population), and occupied a scant 3.2 percent of the board seats in Fortune 500 companies in 2008.

The total African American unemployment rate in February was 12.6 percent - the highest of any ethnic group - although in general, men appear to be losing jobs faster than women.

These issues will be high on the agenda of the annual convention this summer of the National Association for the Advancement of Coloured People (NAACP), one of the United States' oldest and best-known grassroots civil rights organisations, which celebrated its hundredth anniversary on Feb. 12.

NAACP Washington bureau director Hilary Shelton told IPS that "whether young, old or in-between, African American women have seen major challenges" in the last several years.

According to the Centre for Responsible Lending, 1.5 million homes were lost through subprime foreclosures and an estimated 9 to 10-trillion-dollar decline in U.S. household wealth occurred between 2007 and 2009.

"Nearly two-thirds of the wealth possessed by African Americans is in the form of home equity," noted researcher Andrea Harris in last year's National Urban League report on "The State of Black America."

And "half of all households with children are headed by women," she added.

African American women "have the highest labour force participation rate of all women and are roughly just as likely as their male counterparts to be homeowners," thus making them pillars of household stability, Avis Jones-DeWeever, research director at the United Council of Negro Women and affiliated scholar at the Institute for Women's Policy Research, told IPS.

Combined with the fact that "they are more likely to earn less than both white men and women, have fewer assets and are five times more likely than men to receive subprime loans," financial safety nets for African American women in the current economic crisis are sparse if not non-existent.

"Work by the Consumer Federation of America has shown that, in fact, high-income African American women were nearly five times more likely to have received a high-cost loan than their white male counterpart," said Jones-DeWeever.

Although not all subprime loans are predatory - since borrowers with greater credit risks are charged higher interest rates - many minorities have been trapped into subprime loans featuring variable interest rates and hidden penalty fees that far outweigh their credit risks.

"We had one woman testify before the Senate who took out a 20,000-dollar loan. At the end of six years, she was 110,000 dollars in debt," recalled Shelton.

Both African American and Latino communities were unfairly targeted by predatory lending for years prior to the housing collapse. An article titled "Subprime lenders trick homeowners into expensive loans" published in the National Housing Institute's magazine Shelterforce, said that "a September 1999 study conducted by the U.S. Department of Housing and Urban Development (HUD) shows that since 1994, conventional, prime lending to black and Hispanic borrowers has dropped, and that black borrowers are increasingly being turned down for prime rate loans in numbers that far outstrip whites."

The same article states that "studies by Freddie Mac and Standard's & Poor indicate that 63 percent of subprime borrowers would have qualified for conventional 'A' or 'A-'quality loans."

More recently, "over half of all loans made to black borrowers in 2005 and 2006 were subprime, and African American women account for 48.8 percent of all subprime borrowers in 2006," explained Harris.

The adverse effect of subprime lending has rippled into the older African American and Latino communities. Older people remain marginalised and receive little attention.

"To date there have been no studies on how Americans age 50 and over have fared during the housing and mortgage crisis," the American Association of Retired Persons said in a report. The advocacy group found that "among mortgage holders age 50 and over, African American and Hispanic borrowers both have foreclosure rates of 0.51 percent, compared to a rate of 0.19 percent for Caucasians."

Compared to older prime loan holders, older subprime mortgage holders are "17 times more likely to be in foreclosure."

Shelton explained to IPS that as African American women tend to outlive African American men, a trend mirrored in the general population, "there has been a high instance of surviving widows who were approached by unscrupulous lending institutions and brokerages."

In the process of "refinancing their homes [or] doing a little work on their roof, they found themselves pretty much losing what they had," she said.

Because of age and limited incomes, recovering from foreclosure is nearly impossible for those aged 50 and over.

Nicole Mason, executive director of the Women of Colour Policy Network (WCPN), explained to IPS that the "lack of regulations and laws in place to protect people from predatory lending" and inaccessibility of information about the home buying process, different type of loans and interest rates increased vulnerability in African American and Latino communities "across the board."

"In many African American and Latino communities, prime lenders and banks weren't even present, which, in my opinion opened the door for predatory lenders. They advertised on billboards, radio stations, and help workshops throughout the community," she said.

The result has been displaced families who have lost their wealth in the process. Billions of dollars are no longer there to "pass down from one generation to the next," "potentially pay for an education" or "for parents to help their adult children put a down payment on their dreams," Jones-DeWeever told IPS.

"It's been estimated that this crisis alone represents the largest loss of black wealth since the Reconstruction [following the U.S. Civil War]. What we are witnessing is the financial devastation of communities of colour in this nation," she said.

If the "tidal wave of foreclosures" is not immediately stopped, Jones DeWeever said that "within next four years, they'll be joined by another eight to 10 million more."

Currently, the NAACP is trying to make more options available to African American women through education with their outreach programme and by pushing legislators to craft policies with greater oversight, protection and regulations.