The Fragile World Of Inclusion

The 1866 act was a direct response to the Black Codes enacted by Southern states following the Civil War, which aimed to restrict the rights and freedoms of newly emancipated slaves.

The act has been modified several times since its release during the Reconstruction era. For one, Section 1981 of the act protects individuals from discriminatory treatment by granting all persons the right to make and enforce contracts regardless of race and provides legal remedies for those suffering from discrimination. It also, in its time, safeguarded former slaves.

Now, Blum’s new group, the American Alliance for Equal Rights (AAER), is taking on programs it deems discriminatory. Programs such as law firms Perkins Coie LLP and Morrison & Foerster LLP’s diversity fellowships and Fearless Fund, an Atlanta-based venture capital fund that supports Black women who own small businesses, have been accused by Blum and his group of unlawful racial discrimination. Blum is quoted on the AAER website as saying, “Race and ethnicity are attributes, not accomplishments. It is the hope of this organization, as well as most Americans, that these law firms end these racial restrictions and open these fellowships to all qualified applicants.”

Losing The Message

Critics are concerned that Blum’s crusade will bleed into other industries, namely mortgage and financial services, and the countless diversity, equity, and inclusion (DEI) programs associated with each. In an email sent to National Mortgage Professional, Blum only shared the following statement: “Our nation’s civil rights laws apply to all companies, educational and cultural institutions, and government actors. Those laws require each individual to be treated the same, regardless of their race or ethnicity.”

In a New York Times article in July 2023, Blum didn’t explicitly say if challenging DEI initiatives was off the table. He’s quoted as saying, “DEI programs are not challengeable unless [they] involve a racial preference. It is not illegal for a corporation to hire a DEI officer and staff that office with dozens or hundreds of people and compel employees to listen to speeches … What is actionable is a corporation that says, ‘We are putting a help wanted sign on the office door, and here’s the kind of employee that we’re looking to hire. We’re looking to hire those of this race, but not that race.”’

Some say history is just repeating itself. Junia Howell, an urban sociologist and race scholar, called the overturning of affirmative action a legal speedbump. “I will note that from a historical perspective, it is expected that after people of color [can] raise the public’s consciousness regarding injustices and change realities (like what occurred in the aftermath of George Floyd’s murder), then there are systematic legal challenges. After the Civil War and the implementation of Reconstruction, the backlash came in the form of a series of laws now deemed ‘Jim Crow’ laws. After the Brown vs Board victory that desegregated schools, there was the largest outmigration of White children from public schools and multiple legal challenges that resulted in more segregated schools.”

However, some in the industry who lead DEI initiatives are concerned that this could go further than ending affirmative action at the collegiate level. Tai Christensen, president of Arrive Home — which focuses on underserved communities by offering down payment assistance programs — says she’s seen firsthand the gap between white and Black, Indigenous, People of Color (BIPOC) communities. Christensen’s been in the industry for two decades, serving as Arrive’s chief diversity officer and, before, DEI officer at CBC Mortgage Agency.

“One thing I worry about specifically with the housing industry is losing the messaging that people of color do need to be brought into the homeownership fold [to] close the racial wealth gap,” she explained. “It’s been powerful to use my voice as a Black woman and as a homeowner and [someone who] has done everything from retail to underwriting, I’ve seen the lack of black and brown applications that would make it to my desk…as opposed to when I’ve been in the affordable housing sector, how many [BIPOC applications] I see with working in DPA and nontraditional credit programs.”

Fear Mongering

What Christensen pointed out, too, was that following the Supreme Court’s decision to ban affirmative action, she took notice that many large corporations were quickly abandoning their diversity officers. “I get concerned when we start losing the message of authenticity,” Christensen said. “There has been a lot of financial trauma done to communities of color. Redlining, Jim Crow laws … there has been much done to keep people out of homeownership. So, bringing more people of color into the industry allows them to have authentic conversations. [This time] it’s a stark contrast to the 12 to 18-month period after George Floyd was murdered where people were pushing for diversity programs.”

Christensen worries about how litigation could potentially stifle innovation and inclusion in the industry. “I think programs could be put at risk because there are programs for marginalized groups … but what it really will do is make people nervous to create new, innovative programs for communities of color, and I think that’s where the pain point is,” she said. “If you start targeting these programs, people are going to be less inclined to be innovative and not create programs that bring diverse people into the housing market.”

Toniqua Green, vice president of corporate social responsibility at Mr. Cooper, says that the impacts of the affirmative action case aren’t necessarily known. Still, it’s something that is closely being monitored. She says that although there is the potential for companies to be targeted, the best way to combat fear is with extra support.

“So we’ve actually touched on [the case] a few times within our organization, on a super high level. One, reassuring our employees that it is at the college level and it’s not going to have any impact on what we do today,” she said. “But there is still a fear from the employee level about what this looks like futuristically … while we and a lot of organizations have DEI programming, if you don’t have full buy-in from your top leadership, then it makes it very easy for this type of cancerous situation to bleed in.”

With the potential to change marketing, Green says that she and her colleagues at Mr. Cooper are considering how they can still reach underserved borrowers without being deemed discriminatory. “One of the things we talked about internally is that as things continue to come from that particular ruling, we have to get creative,” she explained. “We have to find ways to make sure that we are continuing to reach the underrepresented communities, whatever that looks like, if it’s instead of hosting job fairs at historically black colleges and universities, maybe we’re on-site at a local community center or a library.”

Christensen says that marketing shouldn’t be considered discriminatory, especially when it involves inclusion. “Do [we] not put black and brown borrowers on [our] flyers anymore? You’re trying to reflect what you want these new neighborhoods to look like, right?” Christensen said. “Extending a message to a certain group of people isn’t discrimination. That is just advancing your message for that community in a way that is meaningful for them.”

Representation Matters

Whether it’s underserved communities, borrowers, or employees in the workplace, both Green and Christensen pointed out that equality isn’t necessarily what they’re looking for; it’s equity, meaning recognizing that each person has different circumstances and, therefore, needs different resources to achieve the same feats. “When people say that everybody should be starting from the same spot, that’s not fair because our ancestors didn’t even start out on the same playing field,” Christensen said.