WASHINGTON — Loan denials declined nationally for minority applicants last year, but some major cities reported higher rejection rates for African-American loan applicants, according to a study released Thursday.

The study by the Association of Community Organizations for Reform Now analyzed data submitted by 7,800 lenders in March to the federal banking agencies as required by the Home Mortgage Disclosure Act.

“Several decades after the problems of neighborhood redlining and racial discrimination first came to light, we find that these problems still exist and continue to demand public attention,” Acorn President Maude Hurd said in a statement.

The study found that more minority group members are applying for mortgage loans and getting them. The national denial rate for black loan applicants was 53.75% last year, down from 58.10% in 1998, the study said. For Hispanics, the denial rate was 38.63%, down from 42.19%.

In some cities, however, the denial rate for black mortgage applicants rose substantially last year, the study said. In Milwaukee, for example, the rejection rate grew to 29.04%, from 20.46% a year earlier. Blacks were three times more likely than whites to be rejected for mortgages in Chicago, Milwaukee, Philadelphia, and Washington.

Joe Belew, president of the Consumer Bankers Association, said higher rejections are not necessarily bad because they mean lenders are reaching out to many in their communities.

“It has been read as a very positive sign that you are going the extra mile on marketing,” he said. “The worst possible case would be no declines because that would mean we are not trying.”


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