Magazine article American Banker

BankAmerica's Minority Home Loans Up

Magazine article American Banker

BankAmerica's Minority Home Loans Up

Article excerpt

SAN FRANCISCO - BankAmerica Corp. disclosed Tuesday that its California unit sharply increased the number of home loans made to blacks and Hispanics in 1991. But the unit continued to turn down minority loan applicants far more often than whites.

The figures, coming amid widespread criticism that the banking industry is biased against minority loan applicants, were generally seen as a sign of progress for the nation's second-largest banking company.

Although California's economy is slumping, BankAmerica did better than most major banks in increasing the number of applications from and home loans to minorities.

Shock Waves Reverberating

Last year, when home loan data by race and income were first made public under the Home Mortgage Disclosure Act, the gap in rejection rates set off political shock waves and a spate of bad publicity for banks across the country.

Now updated figures have been released by a number o major banks, showing only slight improvement in the rejection rates among any of them.

Despite BankAmerica's progress, the gap between minority and white denial rates remained striking. The bank said it denied 42% of applications from blacks and 45% from Hispanics statewide in 1991, while turning down 29% of white applicants.

That meant applications from African-Americans or Hispanics were 50% more likely to be rejected than those from whites. That was somewhat better than than in 1990, when BankAmerica denied loans to the two minorities at a 60% higher rate.

The bank said its mortgage, refinance, and home improvement loans to black and Hispanic Californians jumped 21% in 1991. By contrast, home loans to whites rose 12.4%.

The jump in BankAmerica's home loans to minorities in California, plus the narrower. gap between minority and white denial rates, drew qualified praise. …

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