MyBlack^® Wealth

Can racial disparities in lending be fixed?

Source: Dayton Daily News

Serious racial disparities in home loans uncovered in a recent Dayton Daily News examination won’t be fixed unless Congress enacts tough reforms designed to shield consumers from unfair lending practices, according a cross-section of advocates and housing experts. However, area lawmakers are not in lock-step on how to proceed, or even whether to inject more federal regulatory control. The newspaper found that blacks were denied loans and were sold high-cost loans significantly more often than whites with comparable incomes, and even high-income blacks were denied loans at a higher rate than low-income whites. Among the changes called for by advocates: • Create a strong, independent consumer finance protection agency — currently the subject of fierce partisan debate in the U.S. Senate. • Expand the Community Reinvestment Act, which examines the lending record of banks and issues annual report cards, to include mortgage brokers and other nonbank lending institutions. • Pass a strong national foreclosure prevention program. • Collect more data about home loan applications to improve transparency.

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