CPD IN THE NEWS

Stories about historic efforts to address racial segregation in American public education often start with Central High School in Little Rock, Arkansas in 1957. But the story of Little Rock and segregation badly needs updating.

Central High became one of the first practical tests of principles established in Brown v. Board of Education, the Supreme Court ruling that overturned racially separate public schools. When nine black students showed up for opening day of the historically all-white school, Arkansas Governor Orval Faubus called in the National Guard to prevent them from entering. President Dwight Eisenhower responded by calling in federal troops to escort the students into the school, and Faubus eventually backed down.

But the story of racial integration in Little Rock shouldn't be confined to Central High. The same year Central was integrated, another school, Hall High, opened in the all-white part of town with an all white student body. Hall would not integrate until 1959 (Faubus closed all Little Rock high schools in school year 1958-59 to protest federal intervention), when three black girls were allowed to attend.

By the late 1970s and early 80s, through busing and other efforts, Hall had become a more racially diverse school, according to Kathy Webb, who graduated from Hall in 1967.* Webb, who is white, currently represents Ward 3 on the Little Rock City Board and has served in the Arkansas state legislature.

In a phone conversation, Webb tells me that she remembers Hall High as a racially diverse school with an academically solid reputation and a relatively high graduation rate. But then, she notes, something happened: Hall High underwent a profound change.

By 2002, when Webb returned to live in Little Rock after decades away, Hall looked more like a school from the segregationist past than the model of progressive integratio it had once been. Today, the student population of Hall is just 5 percent white, with 70 percent of students having incomes low enough to receive free or reduced price lunch. Hall has also become a school with a reputation for low academic achievement, and in 2014, the state placed Hall on a list of six Little Rock schools in "academic distress."

And while Central High continues to be more racially balanced—54 percent black, 34 percent white—Little Rock School District as a whole is racially imbalanced, as CNN recently reported, with a school population that is 70 percent black in a city that is 55 percent white.

"People have been oblivious to this," Webb says about the re-segregation of the community and Hall High in particular.

What happened to Hall High is an example of what has been happening nationwide, according to a flurry of high profile media stories. Progress on racial integration in schools achieved during the Civil Rights period has gradually eroded, and in many cities, schools are now nearly as racially divided as they were 40 years ago.

"Integration as a constitutional mandate, as justice for black and Latino children, as a moral righting of past wrongs, is no longer our country’s stated goal," writes Nikole Hannah-Jones for the New York Times Magazine.

Hannah-Jones explains how, despite research studies showing the negative effects of racially segregated schools on children's education and long term success, Republican presidents since Eisenhower have appointed conservative Supreme Court judges who have whittled away at court-ordered integration plans until "legally and culturally, we’ve come to accept segregation once again."

But lengthy presentations of statistical data and litanies of high court decisions tend to overlook places where the fight to uphold the vision of a pluralistic school system is still very much alive—places like Little Rock, where the fight is still going on. The fight is inflamed with the same themes from when Ike invaded the district; the belief that "separate would never be equal" and that deep divisions in society have to be overcome by intentional policy decisions.

But now, the actors have changed. This time, those being accused of segregating students aren't local bigots. Instead, Little Rock citizens see segregation as being imposed upon them by outsiders, operating under the guise of a reform agenda.

In this conflict, the issue of local control—the cause Faubus and white Little Rock citizens held high in their fight against federal intervention—has been completely turned on its head, with the state government teaming up with wealthy allies to remove decision-making power from the community. And new entities, such as charter schools (publicly funded schools that are privately operated) and private foundations controlled by a small number of rich people, sow divisions in the community.

Once again, the fate of Little Rock's schools is a test of principles that may be adopted nationwide; only this time, in an effort to divide communities rather than unite them.

‘We Are Retreating to 1957’

"Most people [here] have been escaping rather than preparing for how to confront a world that is becoming more diverse," Arkansas State Senator Joyce Elliott tells me in a phone conversation. Elliott, who is black, is a Democratic member of the Arkansas Senate, representing the 31st District, which includes part of Little Rock.

The means of escape in Little Rock has changed over time, according to Elliott. Private schools enabling white flight from LRSD proliferated in the 1970s and '80s. In addition, district leaders, pressured by wealthy white citizens, redrew attendance zones to separate neighborhoods and avoid busing, a practice still in use today.

As John Kirk and Jess Porter explain in an overview of Little Rock's struggle with segregation appearing in the Arkansas Times, the city has been racially divided for decades by interstate highways, housing policies, and urban planning. Kirk and Porter, both history professors at University of Arkansas at Little Rock, note that segregation has been "consciously created by public policy, with private sector collusion."

"We are retreating to 1957," Elliott believes. Only now, instead of using Jim Crow and white flight, or housing and highways, the new segregationists have other tools at their disposal. First, education funding cuts have made competition for resources more intense, with wider disparities along racial lines. Second, recent state takeover of the district has spread a sense throughout the community of having lost control of its education destiny. Parents, local officials, and community activists continuously describe change as something being done to them rather than with them. And third, an aggressive charter school sector that competes with local public schools for resources and students further divides the community.

And lurking in the background of anything having to do with Little Rock school politics is the Walton Family Foundation, the philanthropic organization connected to the family that owns the Walmart retail chain, whose headquarters is in Bentonville, Arkansas.

A Struggle Over Resources

Arkansas is one of the many states that funds schools less than it did before the Great Recession. According to data compiled by the Center on Budget and Policy Priorities, between 2008 and 2014, school funding in Arkansas declined by more than 9 percent, while during those same years, student enrollment grew by 1.5 percent, according to the most recent measures and projections by the federal government.

Although the state's economy has recovered somewhat from the downturn, the state's politically conservative leadership continues to make cuts to public schools. The budget austerity is particularly harmful to schools that serve higher percentages of low-income children, as Little Rock's does.

According to a district-by-district map of poverty rates created by EdBuild, an education finance reform consultancy, the Little Rock School District, and its adjacent North Little Rock neighbor, are tasked with educating some of the poorest students in the state, with poverty rates of 26.9 percent and 33 percent, respectively, compared to school districts surrounding them, where poverty rates are much lower, around 17 percent.

State budget cuts prompted a $40 million decrease in school spending in Little Rock in early 2015. Then, later that year, a federal judge overturned the state's long-standing obligation to help fund Little Rock's expenses for desegregation. The payments had amounted to more than $1 billion in 60 years. That additional cut helped prompt another round of spending decreases in 2016.

"We are constantly having our resources taken away," Toney Orr tells me in a phone interview.  "Families with means are moving on" to higher wealth schools that surround the district. "But if you’re a family without means, you can't move on," he says.

Orr, an African American father of twin sons in the Little Rock schools, tells me the general lack of resources in the district is leading to a more segregated system as "power struggles between the haves and the have-nots" have intensified.

An article in The Atlantic cites from a lawsuit brought by Little Rock parents that found huge differences between resources in schools with very high percentages of black students versus schools that enroll mostly white students. School conditions and access to computers vary considerably, with schools that are mostly white students having newer, cleaner buildings and plentiful computers while schools with almost all-black and brown students are more apt to be in decaying and decrepit buildings with few computers.

"We have created the conditions for undermining the schools," state senator Elliott says in describing the lack of resources in Little Rock schools, especially those serving low-income, non-white children.

For her part, Elliott has pushed for increases in education spending, particularly for a statewide early childhood education program for low-income kids and for dyslexia interventions in schools. Her Republican colleagues in state government tend to oppose these measures.

'A Very Racist Decision'

Not only does Little Rock have fewer resources for schools, local citizens now have less say in determining how those resources are managed.

In January 2015, the state board of education, an appointed board whose members are selected by the governor, voted to take over the district, dissolve the locally elected school board, and hand authority over to a governor-appointed Education Commissioner.

The takeover, according to an Arkansas independent news outlet, was justified largely on the basis of a previous decision to designate six schools, including Hall High School, as academically distressed. The same news article quotes a Little Rock minister calling the state takeover, "a very racist decision.”

Why racist? State takeovers have been occurring for years, for many reasons, but "racial issues" have long cast a "cloud" over these actions, according to a report by Education Week in 1998. That article quotes numerous sources who argue takeover efforts frequently have "singled out predominantly minority districts and violated the rights of voters to choose their local education policymakers."

The reporter cites survey results showing "out of 21 districts that have ceded power to mayors or state agencies in recent years … all but three have predominantly minority enrollments, and most are at least 80 percent nonwhite. Of eight districts that have been threatened with takeovers, all but two have populations that are predominantly minority, and three are at least 93 percent nonwhite."

More recently, the Alliance to Reclaim Our Schools (AROS), a national alliance of 10 community organizations and rights groups, published a report titled, ”Out of Control: The Systemic Disenfranchisement of African American and Latino Communities Through School Takeovers." The report examined state takeovers of local schools in New Jersey, Louisiana, Michigan, Illinois, New York, and Pennsylvania and found takeovers consistently produce increased racial segregation and loss of public institutions in communities of color.

Earlier this year, AROS director Keron Blair, in an article in Think Progress, compared takeovers "in predominantly black and Hispanic neighborhoods to the voter ID laws that prevent many people of color from casting a ballot, saying they are both examples of distrusting people of color to govern themselves."

Proponents of the takeover of LRSD deny race has anything to do with their actions, and claim that state takeover is simply about improving academics. But there are plenty of reasons to doubt this claim.

‘No Clear Evidence’: What Takeovers Don’t Do

"The rationale for the state takeover was never about academic distress," says Arkansas State Senator Linda Chesterfield, who represents District 30 that includes part of Little Rock. In a phone conversation, she tells me that the Little Rock district—Arkansas' largest—consists of 48 schools in all, some of which had been awarded for being the "most improved" schools in the state, including one of the schools deemed academically distressed.

Adding to Chesterfield's suspicion is the fact that just 15 percent of the schools in Little Rock were judged to be in academic distress, while other districts have higher percentages of struggling schools. In Forest City, for example, three of the district’s seven schools have been labeled academically distressed. In Blytheville, the district's only middle school and only high school are labeled academically distressed. And in Pine Bluff, the district's only high school and one of the two middle schools are labeled academically distressed. Proportionally, Little Rock doesn’t even come close.

Whatever intentions drove the decision, an additional problem is this: state takeovers of local schools have rarely produced academic improvements.

A recent report, “State Takeovers Of Low-Performing Schools,” examines the track record of district and school takeovers in states that have employed this governance method the longest: Louisiana, Michigan and Tennessee. The report concludes, “There is no clear evidence that takeover districts actually achieve their stated goals of radically improving performance at failing schools.”

The report, by the Center for Popular Democracy, finds that wherever the state takeovers occur, “Children have seen negligible improvement—or even dramatic setbacks—in their educational performance.”

A ‘Sharecropper’ School District

What state school district takeovers can do very well, though, is disenfranchise local voters.

As Senator Chesterfield, who was a school board member before running for statewide office, explains, "With [elected] school boards, you have a person you can go to if you have a complaint." But in a state takeover situation, "You can't go to the state commissioner."

"We've been turned into a sharecropper school district," says Orr.

Orr’s reference is to the agricultural system that emerged in America's post-Civil War Reconstruction period where white landowners, instead of giving up property to freed blacks, allowed former slaves to stay on the white man's land as long as the black farmers—and some poor white farmers—turned over a portion of their crops each year to the owner.

In Orr's sharecropper analogy, he likens state education commissioner Johnny Key to the landowner and the appointed superintendents that have churned through the system as the field bosses. In a sharecropper arrangement, "The landowner gave you what he thought you deserved," Orr explains. And in the case of Little Rock, what the district seems to "deserve" is less voice in how the district is run.

The disenfranchisement of Little Rock citizens became especially apparent recently, when Commissioner Key suddenly, and without explanation, terminated the contract of Baker Kurrus, until then the superintendent of the Little Rock School District. (Key had originally appointed Kurrus himself.)

As veteran local journalist for the Arkansas Times Max Brantley explains, Kurrus was initially regarded with suspicion due to the takeover and the fact he was given the helm despite his lack of education background. But Kurrus had gradually earned the respect of locals due to his tireless outreach to the community and evenhanded treatment of oppositional points of view.

But many observers of school politics in Little Rock speculate Kurrus was terminated because he warned that charter school expansions would further strain resources in the district. In advising against expansions of these schools, Kurrus shared data showing charter school tend to under-enroll students with disabilities and low income kids.

He came to view charter schools as a "parallel school system" that would add to the district's outlays for administration and facilities instead of putting more money directly into classroom instruction.

"It makes no sense" to expand charter schools, he is quoted as telling the local NPR outlet. “You’d never build two water systems and then see which one worked … That’s essentially what we’re doing” by expanding charters.

Kurrus also came to believe that increasing charter school enrollments would increase segregation in the city.

"Kurrus amassed significant data illustrating that charter schools have tended to take higher income and white students from the LRSD … further segregating education," Brantley reports. "Compared to the LRSD," Brantley adds, "eStem and LISA [the predominant charter networks in the city] contain lower percentages of children who live in poverty, African-American and Hispanic students, English-language learners and special education students – all of which give the charters a strong demographic edge.

Because of the state takeover and subsequent firing of Kurrus, the citizens of Arkansas are "basically powerless," says Kathy Webb, when it comes to governing their own schools.

"I don't see a master plan for fixing the district," says Antwan Phillips. Phillips is a Little Rock attorney and currently serves on an advisory board for the schools. (He was appointed by Kurrus.)

In a phone conversation, he tells me that if the district were a sick patient visiting a doctor, there would be some kind of diagnosis and prescription, yet none of that has been put forward by the state. And although there may not be a declared plan for Little Rock schools, the undeclared plan seems to call for rapid expansion of charter schools.

'A Parallel School System’

Charter schools existed in Little Rock before the state took over the district. But many people in the city believe the purpose of the takeover is to expand these charters further and add new ones.

The two most influential charter networks in the city, eStem and LISA, both started before the state takeover but were recently expanded by the state oversight board, despite an outpouring of opposition from the community. The expansions will double student enrollment in both charter networks. A third charter school has been given a three-year extension despite "struggling academically," according to a local reporter.

The takeover "is about money," Chesterfield claims. She points to the district's annual budget of $319 million – the largest in the state – and asks, "Why else would LRSD become the focal point of charters" when there are other districts with higher percentages of struggling schools and other districts with significant achievement gaps?

There's certainly not a lot of evidence that expanding charter schools will improve the overall academic performance of the district.

A report on the academic performance of charters throughout the state of Arkansas in 2008-2009 found, "Arkansas’ charter schools do not outperform their traditional school peers," when student demographics are taken into account. (As the report explains, "several demographic factors" – such as race, poverty, and ethnicity, – strongly correlate with lower scores on standardized tests and other measures of achievement.)

Specifically in Little Rock, the most recent comparison of charter school performance to public schools shows that a number of LRSD public schools, despite having similar or more challenging student demographics, out-perform LISA and eStem charters.

There's also evidence charter schools add to the segregation of Little Rock. Soon after the decision to expand these schools, the LISA network blanketed the district with a direct mail marketing campaign that blatantly omitted the poor, heavily black and Latino parts of the city, according to an investigation by the Arkansas Times.

The charter network's executives eventually apologized for the selective mailing. In their apology, they admitted working with state education officials—the very people who are tasked with overseeing charter operations—on a marketing plan that relegated low-income households to digital-only advertising, which makes no sense because these homes are the least apt to have computers and Internet connections.

With so much evidence that charter schools are both underperforming academically and increasing segregation in Little Rock, it’s worth asking: why is this expansion happening?

What Walton Wants

What's happening to Little Rock is "happening everywhere," according to Julie Johnson Holt, a Little Rock resident with children who went through the public schools in the district.

Holt, who is white, now runs a public relations consultancy but is the former communications director for the Arkansas Attorney General and the Department of Education.

More specifically, what's happening in Little Rock, according to Holt, is the outcome of a well-financed and strategically operated effort to target the community for large charter school expansions. "The charter movement has gotten very organized and very determined," she observes.

Holt attributes much of the strategy and wealth behind the effort to expand charter schools in Little Rock to the Walton Family Foundation, whose influence "is much bigger than I realized" she says, recalling her days working inside state government.

Indeed, the Waltons' influence features prominently in virtually every major decision concerning state governance of LRSD.

In the state board's vote to take over the district, as Brantley reports for the Times, members who voted yes had family ties to and business relationships with organizations either financed by the Walton Foundation or working in league with the Waltons to advocate for charter schools.

In another recent analysis in the Times, reporter Benjamin Hardy traces recent events back to a bill in the state legislature in 2015, HB 1733, that "originated with a Walton-affiliated education lobbyist." That bill would have allowed an outside non-profit to operate any school district taken over by the state. The bill died in committee when unified opposition from the Little Rock delegation combined with public outcry to cause legislators to waver in their support.

So what the Waltons couldn't accomplish with legislation like HB 1733 they are currently accomplishing by influencing official administration actions, including taking out Kurrus and expanding charters across the city.

In one case, as Brantley reports again, a Little Rock charter is being expanded via the waiving of certain state requirements – thereby allowing the expansion to be "fast-tracked."

Brantley notes the expansion is being enabled through relocation to a new, larger site in close proximity to an existing public school that is considered "struggling" but is actually higher-rated than the charter school by the state's school evaluation system. The new site is owned by a leasing agent with an address "that happens to be the mailing address for Walton Enterprises, the holding company for the vast wealth of Walton heirs."

Most recently, WFF announced it would commit $250 million to help charter schools in 17 urban district finance access to facilities. One of the urban districts Walton intends to target is Little Rock.

So what are Waltons' intentions for Little Rock? Do they really want to re-segregate schools and take the community back to 1957?

In a recent investigative article I wrote on the influence of the Walton Foundation on education policy, I asked Jeffrey R. Henig what motivates the Waltons' efforts. Henig is a political science and education professor at Teachers College, Columbia University and a co-editor of the book The New Education Philanthropy.

Henig believes the goal the Waltons have in mind is for school districts across the country to be more decentralized and for the expansion of charters to allow for more "more variety" of schools, especially for schools that reflect "differing value systems or ideas of what is a good school."

One of the "value systems" Henig believes the Waltons would like to see more accommodated in public education is more schools that are "rooted in conservative tradition."

It's not hard to believe that an accommodation of more conservative tradition in public education, especially in the South, is the same thing as what Senator Elliott calls "the Old Southern economic structure."

She adds, "We know how that movie ends."

It Doesn't Have To Be This Way

Of course, the movie doesn’t have to end that way.

Arkansas state lawmakers can choose to bring education funding back to levels at least as generous as what was spent in 2008. The funding can be made more equitable by having in place distribution formulas that ensure money goes to schools that need it most.

Also, state leadership can choose to return control of LRSD to a locally elected school board and give people in Little Rock the power to determine the role of charter schools in the district.

And the citizens of Little Rock will need to choose whether to be further divided or unify in support of their historic public schools.

"I'd like to see people in Little Rock deliberately want to have children go to school together," says Elliott.

There are signs Little Rock may be doing that. As Times reporter Hardy notes in his analysis cited above, there is a unified energy throughout all racial populations in the community to take back control of their schools.

"There's been an awakening," city director Kath Webb agrees, noting the number of Hall High School alums who now volunteer in the school to mentor and tutor students and support school events.

When people living around Hall High, where Webb lives, considered renaming the Hall High Neighborhood Association to something that didn’t include the school name, homeowners decided otherwise and retained Hall High.

And the school itself, despite being stigmatized with the label of "failure" and being redesigned around racial imbalance, has chosen to keep in its mission statement a commitment to being a place for "positive learning" and "diverse cultures."

Political leaders in Arkansas should support that mission too.

*Correction: The original version of this article stated that Hall High diversified in the late 1960s. It has been corrected to indicate that that transformation happened in the late 1970s and early 1980s.

By JEFF BRYANT 

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Dade Middle School in Dallas has had a history of problems. Some community leaders want the Dallas school district to boost neighborhood involvement and turn Dade into what’s called a community school. Some folks believe more community and parental involvement would make a difference there.

One weekend afternoon last fall, parents and children streamed into the auditorium at Dade Middle School. Music in English and Spanish blared from the speakers.

People from around the country showed up to speak at the school and they talked about getting parents and more of the Dade community involved in improving the school.

Yesenia Rosales was at the school with her two daughters ages 12 and 16. They moved to Texas from Maryland and she said things at Dade seem pretty good so far.

"Teachers seem very interested in helping students," she said.

Not long ago, though, things were pretty rough at Dade. Fights broke out regularly, principals were being replaced frequently and parent involvement was dismal.

Community leaders like Monica Lindsey told parents at that meeting last fall that it was time for a change. Together, she said, they could convince the district to adopt a new model at Dade and other troubled schools.

“And we’re pushing to have 20 schools turned into community schools by 2020. Can you repeat after me? 20 by 2020. 20 by 2020 …, ” Lindsey told the crowd.

So, what is a community school? According to the Coalition for Community Schools, it’s one that’s built on partnerships between the school and community groups.

A district’s best teachers work there and the school offers extra social services, like mental health counseling. There’s also more parent involvement and the school doesn’t automatically suspend students who act up.

The Dallas school district has worked to stabilize Dade by adding higher-paid and more experienced teachers. Texas Organizing Project and others involved in community school reform, however, envision a broader effort.

“At a community school, you would have 100 or 200 folks participate in some way or another in that planning process,” said Allison Brim, organizing director for the Texas Organizing Project. “You get real buy-in and also input from a larger group of parents and teachers at the school and students as well to make sure that we’re really addressing all of the needs of the entire school community.”

For the past school year, Brim and other members have been meeting with parents, Dade’s principal and district staff to talk about turning the school around. They’ve hosted several community dinners in South Dallas. And, Brim has sent school board president Eric Cowan a letter asking him to consider the issue at a future board meeting.

Brim says she sees some progress at Dade.

“I would say while it’s still not officially our standard that we’re working toward in terms of a community school, a lot of the foundation has been laid," Brim said. "And there’s been huge improvement in terms of the academics and a lot of the key indicators at the school as a result," Brim said.

Advocates point to progress with community schools in places like Cincinnati and Los Angeles.

Last month, The Center for Popular Democracy released a report citing two schools in Austin that went from facing closure to becoming two of the district’s highest-performing schools.

At one of the Austin schools – Webb Middle School – enrollment, attendance and the graduation rate went up. The school now has a full-time community school coordinator and a family resource center that offers parenting classes.

Dallas school trustee Miguel Solis said he’d like the board to consider adopting the community school model or some variation of it.

“That’s not to say that the model will be 100 percent effective if it is implemented the exact same way in Dallas as it is in these other school districts,” he said. “But the principles and tenets of the model are, I think, perfect for our community and particularly the areas that are the most underserved and need the most support.”

Even if the Dallas school board takes up the issue sometime soon, Solis said turning Dade or other schools into community schools wouldn’t happen overnight.

“What the board is likely to do is at some point just have a better understanding of exactly what a community school is, what the goals of community schools are … ” Solis said.

In other words, when it comes to making a commitment about community schools, Dallas school trustees will want to do their homework first.

This story is part of KERA’s American Graduate initiative.

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BeyondChron - March 14, 2013, by Christina Livingston - When it comes to foreclosing on Californians, it looks like Wells Fargo may take the prize. According to a report released this week, Wells Fargo is responsible for more homes in the foreclosure pipeline in California than any other single lender.

Wells Fargo is servicing the most loans, but they are providing less principal reduction to struggling borrowers than either Bank of America and Chase – who themselves should be doing more! Wells Fargo trails behind Bank of America and Chase when it comes to the amount of principal reduction given with first lien loan modifications, according to the Monitor of the multi-state Attorneys General settlement with the five big mortgage servicers.

This is the very same Wells Fargo that just had its most profitable year ever in 2012, with earnings of $19 billion.

The report, California in Crisis: How Wells Fargo’s Foreclosure Pipeline Is Damaging Local Communities, by ACCE (Alliance of Californians for Community Empowerment), the Center for Popular Democracy and the Home Defenders League, shows the harm coming to homeowners, communities and the economy unless Wells Fargo reverses its course and averts some or all of the impending foreclosures.

Click here to download the report.

The report uses data from Foreclosure Radar to look at loans currently in the foreclosure pipeline in California – meaning loans that have a Notice of Default or Notice of Trustee Sale. Of the 65,466 loans in the foreclosure pipeline, close to 20% of them are serviced by Wells Fargo.

If Wells Fargo’s 11,616 distressed loans go through foreclosure, California will take a next $3.3 billion hit: Each home will lose approximately 22 percent of its value, for a total loss of approximately $1.07 billion; homes in the surrounding neighborhood will lose value as well, for an additional loss of about $2.2 billion; and government tax revenues will be cut by $20 million, as a result of the depreciation.

And not surprisingly, African American and Latino communities will be particularly hard-hit. The report includes maps for seven major cities showing minority density and dots for each of Wells Fargo’s distressed loans. In city after city, they are heavily clustered in neighborhoods with high African American and Latino populations.

“My community has been absolutely devastated by the foreclosure crisis, and I put a lot of the blame at the doorstep of Wells Fargo,” says ACCE Home Defenders League member Vivian Richardson. “Wells Fargo’s heartless and unfair foreclosure practices are sending far more homes into foreclosure than is necessary.”

“Our communities and our entire State are still reeling from the housing crisis, and will be for years to come,” said San Francisco Supervisor David Campos. “As this report shows, the numbers of homes still facing foreclosure is enormous. Principal reduction is clearly a critical strategy for saving homes and stabilizing the economy. Wells Fargo and the other major banks should be doing more of it.”

The report recommends:

1. Wells Fargo should commit to a broad principal reduction program.  This means that every homeowner facing hardship should be offered a loan modification, when Wells has the legal authority to do so. The modification should be based on an affordable debt-to-income ratio, achieved through a waterfall that prioritizes principal reduction and interest rate reductions. Junior liens must also be modified.

2. Wells Fargo should report data on its principal reduction, short sales, and foreclosures by race, income, and zip code.  Wells Fargo must be more transparent about its mortgage practices. The bank has an egregious history of harming California’s African American and Latino communities through predatory and discriminatory lending. To show the public that it has reformed, Wells Fargo must make this data available. The people of California need to know that Well Fargo is no longer discriminating against people of color and is fairly and equitably providing relief to homeowners and to the hardest hit communities.

3. Wells Fargo should immediately stop all foreclosures until the first two demands are met In the event that it takes a few months to set up a fully functioning principal reduction program, Wells Fargo needs to immediately stop all foreclosures. Wells Fargo has done enough harm. It’s time to stop. California deserves a break.

ACCE is waging a campaign to push Wells Fargo to be a leader in California, their home state, in saving homes – beginning with their performance to comply with the Attorneys General Settlement and with the Homeowner Bill of Rights, but not ending there.

Click here to sign on to a letter to Wells Fargo CEO John Stumpf to support the campaign demands. 

Author info: Christina Livingston is the Executive Director of the Alliance of Californians for Community Empowerment. ACCE is a multi-racial, democratic, non-profit community organization building power in low to moderate income neighborhoods to stand and fight for social, economic and racial justice. ACCE has chapters in eleven counties across the State of California. For more information visit http://www.calorganize.org/ or follow ACCE on twitter@CalOrganize

 

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Update 3 PM EDT:

In a decision that aligns with progressive demands, the Federal Reserve announced on Thursday that it would keep interest rates near zero in light of "recent global economic and financial developments" and in order to "support continued progress toward maximum employment and price stability."

Presidential candidate Bernie Sanders issued the following statement today after the Federal Reserve announced that it would hold off on raising interest rates:

“It is good news that the Federal Reserve did not raise interest rates today. At a time when real unemployment is over 10 percent, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people. It is now time for the Fed to act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago.”

 The New York Times reports that the Fed’s decision, "widely expected by investors, showed that officials still lacked confidence in the strength of the domestic economy even as the central bank has entered its eighth year of overwhelming efforts to stimulate growth."

Progressives cheered the news, with Josh Bivens of the Economic Policy Institute saying, "Today’s decision by the Federal Reserve to keep short-term rates unchanged is welcome. [...] We hope they continue their pragmatic, data-based approach and allow unemployment to keep moving lower, and only tighten after there is a significant and durable increase in inflation."

He continued: "Tightening before the economy has reached genuine full-employment is not just a mistake, it’s a regressive mistake that would hurt the most vulnerable workers—low-wage earners and workers from communities of color—the most."

However, Reuters reports that "the central bank maintained its bias toward a rate hike sometime this year, while lowering its long-term outlook for the economy."

Which means that pro-worker organizations, which have largely opposed a rate increase that they say would slow the economy and stifle wage growth, will have to keep up the fight.

"We applaud Chair Yellen and the Federal Reserve for resisting the pressure being put on them to intentionally slow down the economy," said Ady Barkan, campaign director for the Fed Up coalition, which rallied outside the Federal Reserve on Thursday. 

"Weak wage growth proves that the labor market is still very far from full employment," Barkan continued. "And with inflation still below the Fed’s already low target, there is simply no reason to raise interest rates anytime soon. Across America, working families know that the economy still has not recovered. We hope that the Fed continues to look at the data and refrain from any rate hikes until we reach genuine full employment for all, particularly for the Black and Latino communities who are being left behind in this so-called recovery."

Earlier...

Progressives are cautioning the U.S. Federal Reserve against slowing the economy by raising interest rates "prematurely"—a decision the Fed will announce Thursday. 

The U.S. central bank will issue its highly anticipated short-term interest rate decision following a two-day policy meeting, with a 2 pm news conference led by Fed Chair Janet Yellen.

As CBS Moneywatch notes, "[t]he decision affects everything from the returns people get on their bank deposits to how much consumers and employers pay for credit cards, mortgages, small business loans, and student debt." That's because a higher rate makes it more expensive for individuals and businesses to borrow, with rising bank lending rates shrinking the nation's money supply and pushing up rates for mortgages, credit cards, and other loans.

Just before the announcement, the advocates, economists, and workers of the Fed Up coalition will be joined by Rep. John Conyers (D-Mich.) at a rally outside the Fed, calling on the central bank to keep interest rates low to allow for more jobs and higher wages.

"The point of raising rates is to rein in an overheating economy that is threatening to push inflation outside the Fed’s comfort zone," explained Josh Bivens of the Economic Policy Institute in the Wall Street Journal on Wednesday. "But inflation has been running below the Fed’s target for years—and its recent moves have been down, not up."

Furthermore, wrote economist Joseph Stiglitz at the Guardian earlier this month: "If the Fed focuses excessively on inflation, it worsens inequality, which in turn worsens overall economic performance. Wages falter during recessions; if the Fed then raises interest rates every time there is a sign of wage growth, workers’ share will be ratcheted down—never recovering what was lost in the downturn."

Progressive activists opposed to an interest rate hike overwhelmed the Fed's public comment system on Monday in a last-minute effort to sway the central bank. Raising the rate, they said, would be catastrophic for working families, particularly in communities of color that are still struggling. The Fed Up campaign, which includes groups like the Center for Popular Democracy, Economic Policy Institute, and CREDO Action, say the central bank "privileges the voices and needs of corporate elites rather than those of America's working families."

"A higher interest rate means that fewer jobs will be created, and that the wages of workers at the bottom will remain too low to live on," wrote Rod Adams, a member of Neighborhoods Organizing for Change in Minneapolis, in an op-ed published Wednesdayat Common Dreams. "That’s because when the Fed raises rates, they are deliberately trying to slow down the economy. They’re saying that there are too many jobs and wages are too high. They’re saying that the economy is exactly where it should be, that people like me are exactly where we should be."

However, at this point, "many observers believe the Fed will not raise rates this week," analyst Richard Eskow wrote on Wednesday.

"The Fed is really the central bank of the world. If the Fed raise rates a little bit, it will have an impact all over the world, particularly in emerging markets," billionaire private equity professional David Rubenstein told CNBC's "Squawk Box" on Thursday.

"I think the Fed is sensitive to that," Rubenstein said, "and I think therefore the Fed is likely to wait for another month or two to get additional data and probably telegraph a little bit better than it has now that it's about ready to do it at a particular time."

Meanwhile, global markets are fluctuating wildly in anticipation of Yellen's announcement and subsequent news conference.

But as Eskow noted, Thursday's real surprise "is that there’s any question at all what [the Fed] will do. That suggests that our economic debate is not yet grounded in economic reality, at least as most Americans experience it."

While the Guardian is providing live updates on the Fed's decision, others are making comment under hashtags that reflect the unbalanced economic recovery:

Source: CommonDreams