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In
2011 Subprime Lending Continued
Disparate at Citi, Chase, BB&T and
Wells while Regulators Lax; BofA &
Capital One Late With Data
By Matthew R. Lee
NEW
YORK, April 2, 2012 -- In the first
study of the just-released 2011
mortgage lending data, Inner City
Press and Bronx-based Fair Finance
Watch have found that banking
behemoths Citigroup, JPMorgan Chase
and Wells Fargo continued with high
cost loans and disparities by race and
ethnicity in denials and higher-cost
lending.
2011 is the eighth year in
which the data distinguishes which
loans are higher cost, over a
federally-defined rate spread of 1.5
percent over Treasury bill yields.
The just released data
show that Citigroup confined African
Americans to higher-cost loans above
this rate spread 3.38 times more
frequently than whites in 2011, worse
that its 2.25 disparity in 2009, Fair
Finance Watch has found.
Citigroup confined Latinos
to higher-cost loans above the rate
spread 2.42 times more frequently than
whites in 2011, worse that its 1.72
disparity in 2009, the data show.
“Even after the bailouts,
lending disparities grew worse and not
better," said Fair Finance Watch.
"Regulatory laxity, at least on fair
lending, has continued despite the
financial meltdown caused by predatory
lending."
For JPMorgan Chase, the
disparity for African Americans in
2011 was 2.21; for the largest of
Wells Fargo's many HMDA data
reporters, the disparity for African
Americans in 2011 was 2.28.
"The Federal Reserve is
becoming more and more bank-friendly,
including with the recent nomination
of former hedge funder and Deutsche
Bank official Jay Powell for a seat on
the Federal Reserve Board. It is still
not clear if the new Consumer
Financial Protection Bureau will get
to this problem," Fair Finance Watch
continued. "The disparities in the
2011 mortgage data of these banks
further militate for aggressively
watchdogging and breaking up these
banks."
Regional bank Keycorp in
2011 confined African Americans to
higher-cost loans above the rate
spread 1.70 times more frequently than
whites -- more than a third of
Keycorp's loans to African American
were rate spread or high-cost loans.
U.S. Bancorp in 2011
confined African Americans to
higher-cost loans above the rate
spread 2.13 times more frequently than
whites, worse than in 2010.
Regions Financial in 2011
denied applications by African
Americans 2.44 times more frequently
than whites.
Comerica, not yet
including its Texas-based purchase
Sterling, in 2011 confined African
Americans to higher-cost loans above
the rate spread 2.81 times more
frequently than whites
Growing Southern bank
BB&T, even absent its subprime
unit Lendmark, in 2011 confined
African Americans to higher-cost loans
above the rate spread 2.59 times more
frequently than whites
Fair Finance Watch has
continued its enforcement project in
the South, most recently raising
issues under the Community
Reinvestment Act on BB&T's
proposal to acquire BankAtlantic. In
response, the Federal Reserve Board
extended the comment period. Much of
BB&T's application has been
blacked out or withheld in full, which
Inner City Press is challenging under
the Freedom of Information Act.
Another acquisition, that
of MetLife's deposits by General
Electric, has proceeded stealthly with
the Office of the Comptroller of the
Currency belatedly stating that it
plays no role in the review since GE
is using a Utah-based "non-bank bank."
These loopholes, like GE, played a
role in the subprime meltdown.
Inner City Press & FFW
have also joined others concerned with
Deutsche Bank's decertification as a
financial services holding company to
escape Dodd Frank including its
capital adequacy rules -- particularly
given Deutsche Bank's role in the
subprime scandal, as lender,
securitizer and now major forecloser.
The law required that the
2011 data be provided by March 31,
following March 1 joint requests by
Fair Finance Watch and Inner City
Press. Several banks did not provide
their data by the deadline, most
notably Capital One and Bank of
America, despite confirming receipt of
the request. Further studies will
follow: watch this site.
For or with more
information, contact
us.
ICP's book on these topics, "Predatory
Bender" CL
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