AUSTIN, Texas - Middle-class families have taken the biggest hit during "The Great Recession," according to a Federal Reserve Bulletin report on family wealth. Expects think declining home values and the foreclosure crisis are largely responsible, since home ownership is the main source of wealth for most Americans.

Algernon Austin, director, Program on Race, Ethnicity & the Economy, Economic Policy Institute, says for people of color, the decline is even worse, since many minorities have been the targets of descriminatory lending practices.

"Following the Federal Reserve data for African Americans, we saw that the home ownership rate actually peaked in 2004, and we've been seeing a rather strong decline since then."

Texas has weathered the foreclosure crisis better than most states, with home values remaining relatively stable. However, many non-white borrowers in the state were handicapped by unfair lending practices going back at least a decade, according to U.S. Department of Justice complaints filed against lenders. Just this month, Wells Fargo agreed to pay out $175 million after being accused of targeting minorities for low-quality loans in 36 states - including more than 1,000 borrowers in the Houston area alone.

Because of such practices, the decline in minority wealth is not surprising, says David Berenbaum, chief program officer, National Community Reinvestment Coalition, given the lax underwriting standards of big financial institutions for home loan products.

"African American and Latino consumers were often steered into products - frankly, subprime loans or nontraditional loans - when they qualified for prime, high credit, high-quality products."

While the Bush administration promoted minority home lending during the last decade, some critics blame the Democrat-sponsored Community Reinvestment Act for the crisis. It's a charge Berenbaum rejects.

"The myth out there is that low incomes from consumers who were not ready for home ownership created this crisis. In fact, most of the subprime loans were refinanced loans, not loans designed to expand home ownership."

The Federal Reserve report says average middle-class net worth rose significantly during the first half of the last decade, then dropped off, with Hispanics and blacks experiencing the sharpest losses.

The June 2012 Federal Reserve Bulletin report is available at http://tinyurl.com/ch2arax.






With the housing bubble responsible for much of the recent decline in middle-class wealth in the United States, some experts say discriminatory lending practices over the past decade have led to an especially sharp wealth drop among people of color. Comments from Algernon Austin, director, Program on Race, Ethnicity & the Economy, Economic Policy Institute; and David Berenbaum, chief program officer, National Community Reinvestment Coalition.

Middle-class families have taken the biggest hit during "The Great Recession," according to a recent Federal Reserve report on family wealth. Experts think declining home values and the foreclosure crisis are largely responsible, with home ownership the main source of wealth for most Americans. Algernon Austin with the Economic Policy Institute says, for people of color, the decline is even worse, as many minorities have been the targets of discriminatory lending practices.

"Following the Federal Reserve data for African Americans, we saw that the home ownership rate actually peaked in 2004, and we've been seeing a rather strong decline since then."

Texas has weathered the foreclosure crisis better than most, with home values remaining relatively stable. Still, many non-white borrowers in the state were handicapped by unfair lending practices going back at least a decade, according to U-S Department of Justice complaints filed against lenders. Just this month, Wells Fargo agreed to pay out 175-million dollars after being accused of targeting minorities for low-quality loans in 36 states - including more than a thousand borrowers in the Houston area alone.

Because of such practices, the decline in minority wealth isn't surprising, according to David Berenbaum with the National Community Reinvestment Coalition.

"African American and Latino consumers were often steered into products - subprime loans or nontraditional loans - when they qualified for prime, high credit, high-quality products."

While the Bush administration promoted minority home lending during the last decade, some critics blame the Democratic-sponsored Community Reinvestment Act for the crisis. It's a charge Berenbaum rejects.

"The myth out there is that low incomes from consumers who were not ready for home ownership created this crisis. In fact, most of the subprime loans were refinance loans, not loans designed to expand home ownership."

The Federal Reserve report says average middle-class net worth rose significantly during the first half of the last decade, but then dropped off - with Hispanics and Blacks experiencing the sharpest losses.

Middle-class wealth is on the decline, and many say the housing bubble is the primary reason. With the decline even worse for people of color, experts are pointing to unfair lending practices. Peter Malof has more.

Peter Malof reporting.

Reach Austin via Karen Connor at 202-775-8810; Berenbaum at 202-628-8866. Federal Reserve Report: http://tinyurl.com/ch2arax. DOJ suit: http://1.usa.gov/MU3rys.






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One in three Americans indicates they're living paycheck-to-paycheck, and that includes many artists. A Minnesota organization is expanding its guaranteed-income program for these individuals, so they can carry on with their creative contributions.

This fall, Springboard for the Arts announced it was tacking on more years and recipients to its pilot initiative, launched early in the COVID-19 pandemic.

Ricardo Beaird, community development director for Springboard for the Arts, said the changes mean that over the next five years, a total of 100 participants will receive monthly payments of $500, no strings attached. He said they're building a case for systemic change in how artists are supported.

"Artists are vital to the cultural and economic fabric of our communities. They help us imagine new futures. They help us rethink public spaces and they create connections that make our lives richer and more meaningful," Beaird explained.

But he added that artists tend to operate in a "gig economy" and often fall through the cracks because financial stability is out of reach. Based on initial program data, 36% of recipients used the income for essential purchases and services. This effort is part of a patchwork of similar programs surfacing around the U.S. for low-income populations, including one led by the city of St. Paul.

Springboard's guaranteed-income program, funded by private foundations, helps artists in St. Paul and rural Otter Tail County. Beaird said they're also trying to be more dynamic with their assistance by offering things such as personal finance guidance, and added that can help artists overcome the short-term thinking they're often locked in.

"I'm a theater artist, so the way that I thought about my year was in these six-week bursts, and it didn't really give me the opportunity to think about, 'What does my next year look like, or my next two years, or five years look like?" he continued.

Another benefit is helping emerging artists be more financially resilient when dealing with unexpected expenses, such as a hospital bill or car repair.


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Some federal incentives to bring internet access to Indian Country neglected to require tribal participation, according to a new report.

The Federal Communications Commission's 2020 Rural Digital Opportunity Fund awarded more than $9 billion to cable and satellite operators, phone companies and others to deploy broadband in areas lacking it. The report from the Institute for Local Self Reliance showed the program included no requirement for tribal consent or engagement before companies placed bids.

Jessica Auer, tribal broadband policy analyst at the Institute for Local Self Reliance and the report's author, said it left some tribes, especially those with their own broadband projects, in what she called a "bureaucratic boondoggle," leading to "tension and confusion."

"They're required to spend resources and staff time trying to contest these awards, confronted by outside providers who feel that they have a mandate and a right to build on sovereign tribal lands," Auer explained.

Auer argued not including tribal nations at the table is, in many cases, considered a violation of tribal sovereignty. According to a 2022 study, households in tribal areas are about 24% less likely to have access to broadband internet than others.

In some cases, tribes are able to build the projects themselves. The Rosebud Sioux Tribe was awarded a $40-million grant to connect more than 1,500 tribal households with fiber internet access and an LTE wireless network.

Auer noted it is preferable to a company building infrastructure in unfamiliar terrain, which can be detrimental.

"I just can't think that it necessarily makes them the most long-term effective and sustainable answer, when they have so little knowledge and familiarity with local realities," Auer added.


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Iowa has enlisted the help of businesses across the state to take on human trafficking.

Tomorrow marks World Day Against Trafficking in Persons, and the state is calling on residents and employees alike to be aware of the signs that someone could be a victim.

The widepread use of social media has made it harder to corral sex traffickers in recent years.

Secretary of State Paul Pate launched the Iowa Business Against Trafficking Initiative in 2022, to ask 300,000 employees of 800 Iowa businesses to be the eyes and ears if they sense a person is being trafficked.

"Well, we're not asking anyone to be a hero here," said Pate. "What we're asking them to be is good neighbors. It's like a neighborhood watch program. You watch for suspicious or unusual behavior, activities that are going on, and let law enforcement know - because they can't be everywhere all the time."

Pate has enlisted the help of the U.S. Department of Homeland Security this year - which has started an initiative to remind people that if they suspect they spot human trafficking, they should say something to local authorities.

Tom Ruck is the senior engagement manager for the Department of Homeland Security's Blue Campaign against human trafficking, and has been in Iowa to boost Pate's efforts at confronting it.

He said it's important not to try to physically step in and rescue a person who appears to be a trafficking victim, even if that's the natural inclination of someone who wants to help.

"But we could put you at harm for doing something," said Ruck. "The trafficker may try to hurt you - and definitely the person being trafficked could be put in harm's way, down the road. So we say, 'Call your local authorities.'"

He added that traffickers often prey on young people who report feeling isolated, depressed, or estranged from their parents - and the criminals work those angles to make contact with prospective victims.




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