Banking Discrimination Adds to Dip in Minority Wealth
(USA Today) — After making big financial gains in recent decades, African Americans and Hispanics are again losing ground, critics say. Rather than blaming the lingering effects of the recession, a growing number of reports point to financial discrimination as a major cause. “Communities of color have received the worst treatment at a very high cost,” says Michael Calhoun, president of the Center for Responsible Lending (CRL). “We estimate 20% of African-American and Hispanic homeowners will lose their homes in this housing crisis,” more than twice as high as white households. Homeownership is the primary engine of wealth, but the housing slump only partly explains the growing gap affecting minority families, says John Taylor, CEO of National Community Reinvestment Coalition (NCRC). “It’s about a dual system of finance,” he says. “People of color do not have the same access that most American citizens enjoy.” While most consumers are able to go to a full-service bank branch that offers an array of competitively priced products and services, minorities are disproportionately forced to go to payday lenders, pawnshops and high-cost mortgage lenders, Taylor says.