Banks extend pricier loans to minorities: study
By Joanne Morrison Mon Apr 7, 4:47 PM ET
WASHINGTON (Reuters) - The largest U.S. banks gave expensive subprime mortgages twice as often to minorities than whites last year, according to a study of bank loan data released by a fair lending activist group on Monday.
The study, conducted by Inner City Press/Fair Finance Watch found that banks such as JPMorgan Chase, Citigroup, Bank of America, and Countrywide issued subprime loans to minorities more than twice as often as whites. At some institutions, the number of subprime loans issued increased, even amid a growing credit liquidity crisis.
"One of our most surprising findings was that the largest players just continued making subprime loans in a disparate way even as the industry collapsed around them. To us this means that they intend to continue this gouging of customers just with fewer competitors in the future," said Matthew Lee executive director of the Bronx, New York-based group.
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In the study, Inner City Press found that Citigroup in 2007 extended to African Americans these higher-cost loans above this rate spread 2.33 times more frequently than whites. Fully 109,511 of Citigroup's 448,542 mortgages in 2007, or 24.41 percent, were high cost loans over the rate spread.
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