New Report on Lending in St. Louis, Milwaukee and Minneapolis Shows Clear Racial Disparities


WASHINGTON, D.C. – (RealEstateRama) — The National Community Reinvestment Coalition (NCRC) released an analysis of home purchase lending in St. Louis, Milwaukee, Minneapolis, and the surrounding areas. The analysis reveals racial and income disparities in mortgage lending in all three cities.

“This report clearly shows the lack of mortgage lending in low- and moderate-income neighborhoods and predominantly minority neighborhoods,” said NCRC’s President and CEO John Taylor. “Without access to responsible mortgage credit and the opportunity to become a homeowner, the ability for working people to build wealth is severely curtailed. ”

“Until our financial institutions make a full and genuine commitment that creditworthy borrowers, regardless of their skin color, will be able to access responsible credit, the economies in these neighborhoods will continue to deteriorate.”

Key findings:

  • In the Cities of St. Louis and Milwaukee, the racial composition of the neighborhood is a strong predictor of mortgage activity. Lending is greater in neighborhoods with larger white than African American populations.
  • In the Milwaukee Metropolitan Statistical Area, whites represent 70 percent of the population, yet received 81 percent of the loans. African Americans are 16 percent of the population yet only received four percent of the loans.
  • In the St. Louis Metropolitan Statistical Area, while white residents are 75 percent of the population, they received 83 percent of the mortgage loans. In contrast, African American residents are 18 percent of the population, but received only four percent of the loans.
  • In Minneapolis, the variable that best predicts home loan activity is the median family income of the neighborhood, though the loan market favors white applicants slightly.
  • Lending in low-income tracts in the City of Minneapolis was visibly lower, but some areas of moderate income saw extensive investment. Meanwhile, there is a large imbalance in lending toward the exurban ring outside the beltway.
  • It is difficult for qualified borrowers of any race to secure credit in high-poverty, hyper-segregated areas.

Local community advocates also commented on the findings:

“This report simply puts numbers to what we see every day,” said Elisabeth Risch, Co-Chair of the St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA). “Majority African American neighborhoods don’t have the same access to credit that white neighborhoods enjoy. We still have a lot of work to do before we close the book on St. Louis’ ugly history of redlining.”

“The future of the Milwaukee region, where one-third of the residents are people of color, is tied very closely to ensuring opportunities for communities of color,” said Bethany Sanchez, Director of Fair Lending at the Metropolitan Milwaukee Fair Housing Council. “Lenders and policymakers must take action to ensure that every credit-worthy borrower has equal access to fairly priced credit. Without that access, predators and scammers fill the gap, targeting their fraudulent and discriminatory lending practices on credit-worthy borrowers.”

“This research illustrates what advocates and community members in these neighborhoods experience – there are disparities in lending,” said Lyndel Owens with Jewish Community Action in Minnesota. “We need financial institutions and leaders in government to commit to ensuring that all communities have fair access to mortgage credit.”

Click here to see the full report.

In November of 2015, NCRC released an analysis of home purchase and small business lending in Baltimore, Maryland, and the surrounding areas.


About NCRC:
NCRC and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business development.

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