The Washington Post, June 22, 2018: Small banks discriminate against people of color. A new law makes it worse.
President Trump and Congress continue to chip away at regulations for financial institutions, arguing, in part, that these moves will support small and community banks. “Our smaller banks are engines of growth,” House Speaker Paul D. Ryan (R-Wis.) said when the bank deregulation bill passed last month. “This bill opens the door to new opportunities for families and small businesses.”
However, community banks’ racially discriminatory patterns are well-documented when it comes to locating branches and making loans . This week, we published a study that reveals that these practices are present even in the most basic of products: entry-level checking accounts.
Ninety-eight percent of Americans who use a bank have a checking account; it is necessary for a wide range of transactions that shape everyday life and enable investment for the future. A checking account is essentially a prerequisite for almost all other types of financial services — from savings accounts to home loans. As a result, banks’ racially disparate patterns in costs and fees for these accounts threaten to claw back advances that consumers and communities of color have made toward full participation in the economy.
