Magazine article American Banker

Report: Some Big Banks' Minority Lending Worsened

Magazine article American Banker

Report: Some Big Banks' Minority Lending Worsened

Article excerpt

WASHINGTON -- Lending disparities between minority and white borrowers increased in 2005 at some of the country's largest banks, according to a study on home mortgage loan prices released Monday by Inner City Press/Fair Finance Watch.

Citigroup Inc., HSBC Bank USA, Wells Fargo & Co., Bank of America Corp., and Washington Mutual Inc. were among the large lenders cited by the study, which considered about 60 institutions.

The study is the first analysis of last year's Home Mortgage Disclosure Act data to come out since it became publicly available March 31.

Studies based on 2004 data -- the first year pricing information was disclosed -- had found that minorities were likelier than whites to receive high-cost loans. Inner City Press said it had expected the margin to shrink at many institutions in 2005. Instead, it said, the opposite was true.

"I thought that lenders shamed and chastened by the first year would have done a better job, would have found a way to say, 'We need to not charge minorities high-cost loans unfairly,' " said Matthew Lee, the executive director of Inner City Press, a pro-consumer group. "What we've found is that at some of the largest lenders, things have gotten worse."

For example, the study said that in 2005 at Citigroup, African-Americans were seven times more likely to receive a high-cost loan than white borrowers compared with a year earlier, when their chances were four times as great.

The study also said that more than 80% of HSBC's home purchase loans to African-Americans and Latinos cost more -- a higher percentage than in 2004.

The study found that in 2005 Bank of America was 2.38 times more likely to deny a Latino loan applicant than a white one. African-Americans applicants were denied 2.27 times more frequently than whites at the bank, the study found.

A B of A spokeswoman said that only 1. …

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