Racial bias

A new study has found that Black and Hispanic borrowers are denied conventional mortgages at higher rates than white applicants and pay up to $2,000 more to refinance.

There is a gaping hole in the financial system in North Minneapolis, where people are preyed upon by payday lenders and fringe bankers, according to Debra Hurston, executive director of the Association for Black Economic Power. Hurston is creating a credit union for this community to help break residents out of a cycle of exploitation and debt. But the issue is far bigger than one city, and the opportunity is one that any bank or credit union can seize.

Lenders don't oppose CFPB data collection for small-business loans but favor changes that would minimize unintended consequences for borrowers, a Consumer Bankers Association official writes.

The bank asked to move the discrimination case from a Black magistrate to a supervising White district judge, which attorneys for plaintiffs said was an attempt to ‘redline the federal court.’

Banks have supported initiatives aimed at closing the racial equality gap but the industry risks undermining this by fighting new rules to gather demographic data on small-business lending.

The municipality and the bank have been at odds over similar issues in the past, and no agency currently has deposit accounts with the lender.

Wells Fargo won an early round in a lawsuit accusing the bank of running a predatory mortgage lending scheme in the Atlanta area before the 2008 financial crisis and continuing to discriminate against minorities for more than a decade afterward.

Wells Fargo, which approved fewer than half of mortgage refinancings sought by Black homeowners in 2020, prompting calls for regulatory investigations, greenlighted a larger share of applications from such borrowers last year.

The actions involved are based on findings by an interagency task force first convened last year by Marcia Fudge, secretary of the Department of Housing and Urban Development.

Senate Banking Committee Chairman Sherrod Brown and other Democratic senators called on Thursday for regulators to investigate Wells Fargo’s treatment of Black homeowners seeking to refinance mortgages during the pandemic.