The Director of the Division of Consumer and Community Affairs, Sandra F. Braunstein, released a statement yesterday concerning the Fair Lending and Home Mortgage Act. In her statement to the House of Representatives and the Committee of Financial Services, there were several reports of referrals to the Department of Justice that were related to discrimination.

Four cases related to racial/ethnic discrimination were passed to the Department of Justice in the first half of this year. Evidence was found showing that minorities were being charged at higher mortgage and automobile loan rates. Automobile loans were marked up based on the borrower’s race. Other lenders were found to have policies that prohibit mortgage lending to groups of Native Americans and African Americans.

It was found that loan officers were being offered incentives to charge overages. Hispanics and African Americans were reported to have paid higher overages than non-Hispanic whites according to Metropolitan Statistical Areas.

A fifth discrimination case was referred to the Department of Justice this year. Combined incomes were counted for married borrowers but not for co-applicants who were not married. Even though applicants were applying together for the same property, they were denied a combined income figure.

Braunstein detailed the efforts of the Federal Reserve to supervise and enforce fair lending laws. “When conducting fair lending examinations, our consumer compliance examiners perform two distinct functions. First, examiners evaluate the bank’s overall fair lending compliance program… Second, examiners determine if the bank has violated the fair lending laws,” she explained.

The Equal Credit Opportunity Act and the Fair Housing Act are both in place as protective guides that guard against discrimination. It is the responsibility of every lender to make sure that each borrower is treated equally and judged by fair standards unrelated to race, religion, disability, national origin, familial status, or sex.

It is a shame that culture, skin color, age, religion and sexual orientation, are things that people with limited power take into consideration. Racism and other types of discrimination are prevalent in our society, and unfortunately, it doesn’t look like it is going to disappear. People have become more clever in attempting to disguise their hatred and bias, but it is far from ceasing to exist.

We have come a long way as a nation, particularly upcoming generations, with being fair, tolerant, and respectful of those who are different from us. We may all have more in common than we think that we do. Some people just don’t have the open mind to consider that.

Everyone should have the same rights and be treated as a human being in every situation, whether they are shopping for a home, looking for a job, or ordering a pizza! It is atrocious to consider one as superior over another. It is ignorant to have that kind of attitude towards people who aren’t exactly like you.

If you or someone you know has been discriminated against, don’t hesitate to report it. Even if you don’t take your case to court, you can file a complaint with the Better Business Bureau. If you do want to take it to court, you can find a lawyer that specializes in discrimination cases at this Lawyers.com.

Just click on your state.

The Federal Open Market Committee (FOMC) is composed of the Board of Governors, which contains seven members, and five Reserve Bank Presidents from the districts. Yes, there are twelve districts, but the FOMC holds five presidents only at any given time. The New York district president is always on the board and each of the other district presidents rotate, serving one year terms.

What do they do?

This team of officials meets eight times per year. They are required by law to meet at least four times, but need have been, since the early 1980s, that eight meetings are needed. If issues arise, they do not hesitate to meet more than eight times throughout the year.

The Reserve Bank President of New York is responsible for presenting information on the financial and foreign exchange markets at each meeting. All of the presidents attend and give their input to the monetary policy discussions, but only four of them, in addition to the New York Reserve Bank President, are permitted to vote on any changes. The goal of these meetings is to consider ways to improve the economy.

After discussing options, the FOMC votes on whether or not to buy or sell government securities in the open market. Purchasing open market securities increase the amount that the Reserve Banks have available to lend, and lowers the federal funds rate. Selling the securities raises the federal funds rate and decreases the amount that the banks are able to lend.

What’s the latest news?

The press release from the latest meeting, from June 28th, stated that they have voted to maintain the current federal funds rate, 5-1/4 percent. It also stated that inflation has shown slight improvements recently, yet still continues to be a concern of the committee. Economic growth for the nation has been moderate for the first half of the year.

Minutes from the meeting state that energy prices have increased the overall inflation for the second quarter. (Everyone is complaining about gas prices, right?) Although core consumer prices are favorable, that is not enough evidence to say we have a stable cap on inflation.

Employment rose at a slower pace than during the first quarter, but is still increasing at a moderate pace. Overall unemployment for the country is at 4.5%. (That’s not bad overall, but there are still some pockets of higher unemployment rates in the country.)

Residential construction activity has declined, which is related to the increase in unsold new home inventory. (If people are not buying the new homes already built, why build too many more?) Single family housing starts have also declined.

Global demand for U.S. exports is high, which is good for us. Considering the fact that the exchange rate for the dollar is weak, overseas sales are beneficial, particularly to Europe. On the other hand, imports pose the risk of destabilizing inflation.

Details of the semi-annual report to Congress on monetary policy and economic outlook were also discussed. (There will be more on that next week!)

The next meeting for the FOMC is in about two weeks, and the press release should be available in a month. I’ll keep you posted!

The United States is divided into twelve financial districts. Each of these districts has a local Federal Reserve Bank. What are these banks for? Let us take a look.

Federal Reserve Banks, also called Central Banks, are not for individual banking. The district Federal Reserve Bank is where local commercial banks do banking. Certain parts of national Treasury are also taken care of by the Federal Reserve Banks. I will get to the details of their responsibilities shortly, but I first wanted to emphasize that these banks play a major role in implementing the federal monetary decisions that are made by the Board of Governors. It would be virtually impossible to run a fair banking system, protect consumer rights, or manage government funds without them.

How is the bank run?

Each Federal Reserve Bank has a board of directors that contains nine members. Each bank has limited autonomy, under the management of the Board of Governors.

A research staff is assigned to each bank that gathers and analyzes economic data that will aid the formulation of monetary policy. They also advise the individual banks on other more local monetary decisions. The board of directors of each bank supervises and regulates all the activities of the bank, and decides how to advise monetary policy.

What does the bank do?

The primary purpose for the Reserve Banks is to influence the flow of money and credit in the nation’s economy. Within their district, they regulate and supervise the activities of state-chartered member banks and bank holding companies in their district. In a nutshell, they make sure that your bank follows the law. The Federal Reserve Banks also do the same for foreign banks located in the United States.

Central Banks offer input from the perspective of their district’s economy to the formulation of monetary policy. The statutes that govern the very financial institution that you use for your banking needs are supervised and regulated by your district Central Bank.

Check processing and wire transferring is handled and monitored by the Central Banks as well. Billions of checks are cleared every year through the Federal Reserve Banks. Thousands of depository institutions are electronically linked to these district banks.

Who’s money is in the bank?

Each Federal Reserve Bank holds government funds and collateral, as well as national Treasury funds such as income taxes withheld. Excess funds from banks within district are also stored in the local Reserve Bank.

You may not open a checking account at one of these banks, per se, but they play a major role in the form and function of the bank or banks that do hold your accounts. Your protection as a consumer is highly regarded, and the guidelines provided to banks under the Federal Reserve are very structured and well informed.

Visiting a Federal Reserve Bank

Central Banks are a great resource for consumer rights information, local economic research, and personal finance tips. All of the Reserve Banks have frequently updated websites with tons of resources.

Financial education is one of the strong suits of our nation’s Federal Reserve Banks. Central Banks offer conferences, tours, speeches, and educational workshops throughout the year. To find your local district Federal Reserve Bank visit the Federal Reserve website and click on your local area. You will be led to the home page of your financial district were you will also find consumer information and detailed economic research.