The Hill, February 21, 2020: Reduce lending in low-income neighborhoods? Incredibly, the government has a plan that could help banks do that
Like the nation as a whole, America’s banks have a dark history of discrimination against minorities, immigrants and poor people who live in poor neighborhoods.
That is, it should be history.
But it isn’t. Unequal access to mortgage and small business loans is still a problem. In many communities across the nation, loan denial rates for blacks and Hispanics are far higher than for whites with similar incomes.
Recent tests with “mystery shoppers” in a handful of cities documented one way this discrimination happens. Put simply: Bank employees treated white customers better than black and Hispanic customers with similar or better qualifications.
Along with discrimination, various market failures have led to credit deserts and underserved urban and rural communities.
