Wells, BofA and JPM Chase Were
More Disparate By Race in 2008 than Wachovia or Countrywide, Trends
Under Current Regulators
NEW YORK, April 2
the first study of the
just-released 2008 mortgage lending data, Inner City Press / Fair
has found that the seeming survivors of the banking meltdown, Wells
of America and JPMorgan Chase, had worse disparities by race and
denials and higher-cost lending than the banks they acquired, Wachovia
Countrywide. Mortgage lending in the U.S. will become more and not less
disparate because of the emergency mergers and bailouts engineered by
regulators, the study predicts.
Finance Watch notes that JPMorgan Chase's massive closing of branches
Washington Mutual will also make credit harder to come by, especially
neighborhoods. 2008 is the fifth year in
which the data distinguishes which loans are higher cost, over the
federally-defined rate spread of 3 percent over the yield on Treasury
securities of comparable duration on first lien loans, 5 percent on
Fargo Bank in 2008 confined African Americans to higher-cost loans
rate spread 2.18 times more frequently than whites, according to Fair
Watch. Wachovia Mortgage FSB, the largest lender of Wachovia which
acquired, had a lower disparity, at 1.46.
of America NA in 2008 confined Latinos to higher-cost loans above the
spread 1.51 times more frequently than whites, the data show.
which B of A acquired, had a lower disparity, at 1.22.
Chase was even more disparate to Latinos, confined them to higher-cost
2.10 times more frequently than whites, almost as pronounced as its
between African-Americans and whites, 2.26. Citigroup, perhaps due to
shrinking, some say dying, business had disparities of 1.90 for African
Americans and 1.23 for Latinos. For US Bancorp, the disparity for
Americans was 1.55 and for Latinos, 1.35.
banks the regulators favored in 2008, allowing emergency takeovers like
JPMorgan Chase's of Washington Mutual, Bank of America's of Countrywide
Merrill Lynch, and Wells Fargo's of Wachovia, were the most racial
lenders," states the Fair
Finance Watch report. "The regulators did not put any conditions on the
Program bailouts, for example allowing Chase to
close dozens of Washington
branches. As things are going, it will be worse and more disparate in
new administration has yet to make any substantive change to this."
lenders had worse denial rate
disparities in 2008 between Latinos and whites then between African
and whites, a change from previous years. Bank of America NA, for
denied applications by African Americans 1.44 times more frequently
whites, while denying Latinos fully 1.57 times more frequently than
Atlanta-based SunTrust in 2008 denied applications by African Americans
times more frequently than whites, while denying Latinos fully 1.78
frequently than whites.
required that the 2008 data be provided by April 1, following March 1
by Fair Finance Watch. Some lenders did
not provide their data by the deadline. Regions Financial provided its
the deadline but only in paper format, on over 2000 pages, so that it
yet be computer-analyzed. Further studies will follow.
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ICP's book on these topics, "Predatory
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