Everyone's talking these days about the deplorable environmental record of Citigroup. A public campaign is rapidly gaining momentum to force the financial giant to incorporate environmental ethics into its investment practices. It is in no way my intention to detract from the importance of this movement. When Citigroup is funding projects like the Three Gorges Dam in China that even the World Bank — not renowned for its environmental sensitivity — has declared to be too destructive to support, there's definitely a problem.
But I want to make sure that in targeting Citigroup's environmental policies, activists — especially student activists on this campus — don't overlook Citigroup's horrendous record of racial discrimination and predatory lending in low-income and minority communities, a record that has been laid out at a Website called www.innercitypress.org.
Just before school started this year, Citigroup announced its intention to buy The Associates, a lending institution that targets low-income communities for high-interest loans. Associates has been under investigation by the Department of Justice and is facing a number of class-action suits for its racially discriminatory lending practices.
Why would Citigroup want to buy such a scandal-plagued institution? Consider the following figures. In 1999 in nearby Philadelphia, Citicorp Mortgage provided 89 refinance loans to whites and only three to African Americans. Associates, however, made 64 high-interest refinance loans to whites and 74 to African Americans. Similar numbers for both institutions are found in Newark — where Citicorp Mortgage is seven times more likely to deny a loan to an African American than to a white applicant — Buffalo, Chicago, Los Angeles, Memphis, St. Louis, Washington, D.C., and other major cities.
The pattern? Citigroup disproportionately rejects African-American applicants, forcing them to turn to high-interest, and often predatory, loans offered by institutions like Associates. By merging with Associates, Citigroup can maximize its profit in this unfair lending system.
As if that weren't enough, Citigroup, one of the largest contributors to both the Democratic and Republican parties, has successfully lobbied for legislation that allows corporations to make large acquisitions like this one without the approval of the Federal Reserve Board. This also means that mergers like this can occur without the traditional period of public commentary in which affected communities can voice reservations about the acquisition.
This year, as Princeton's Third World Center celebrates its 30th anniversary with the theme of promoting social justice, Princeton students need to take a stand opposing aggressive and unethical institutions like Citigroup that increasingly undermine equality and democracy in our country. We attend the nation's top university, a major recruiting target for potential employees, and our board of trustees includes a major Citigroup power-player. We have the power to leverage serious change in this destructive institution. Let's use it. John Kimble is a history major from New Orleans. He can be reached at jgkimble@princeton.edu.
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