Racism in finance? Major banks issue higher interest rates to minorities

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  • Me3799 Grand Rapids, MI
    July 1, 2014 6:30 p.m.

    I see there's a lot of ignorant people making comments on this article. But that is expected amongst you people.
    Did anyone read the article?
    It said "The U.S. sued New York-based GFI Mortgage Bankers Inc. for allegedly charging higher rates to African American and Hispanic borrowers than white borrowers IN SIMILAR SITUATIONS" That means that the credit score, life style, and income were similar. They did a comparison before making these claims. How could they issue a lawsuit without having facts, Duh.

    And yes, in cities where blacks and hispanics are considered "Minorities" they are often, finically challenged. Because Europeans try there best to accomplish that in the minority communities.
    But in cities & states like Atlanta, Florida, Washington, Texas, Charlotte, Maryland, etc. There's a large population of successful minorities.

    Oh, and technically whites are the minorities!!!!

  • Reality conscious Salt Lake City, UT
    April 4, 2012 5:11 p.m.

    Screwdriver, you are correct.

  • Screwdriver Casa Grande, AZ
    April 4, 2012 2:54 p.m.

    Several centuries of slavery and racism take time to recover from. There are still large percentages of families that haven't had that leg up from comming from a family that had disposible income for education and better incomes that lead to good credit ratings. It's still racism, I'm sure these same banks are "light" at the top as well.

  • Reality conscious Salt Lake City, UT
    April 4, 2012 10:34 a.m.

    Lending institutions do not give loans to avoid lawsuits. They consider credit scores in everything that they do. Credit and house price explosion led to a building boom and eventually to a surplus of unsold homes, which caused U.S. housing prices to peak and begin declining in mid-2006.

  • lost in DC West Jordan, UT
    April 4, 2012 10:32 a.m.

    Do you think a group like Fair Finance Watch and Inner City Press maybe has an agenda?

    Reality conscious,
    The article does not give information on credit profiles, so I am confused when you say speaking on facts and not assumptions. I guess you are drawing information from another study not mentioned in the article? I would also think the NCRC has a biased agenda, so I would put less stock in their studies. Same can be said for BO’s HUD.

    If, as you suggest from studies by the Fed and FDIC (independent bank regulatory agencies) it can be shown minorities with better credit profiles are charged higher rates than non-minorities, the perpetrators of those crimes should be punished.

    K is absolutely correct, the housing crisis and our current economic malaise was brought about by the insistence from dems that credit standards be thrown out the window so everybody can “buy” a house.

  • K Mchenry, IL
    April 4, 2012 7:36 a.m.

    Giving loans to everybody to avoid law suits and make congress happy caused the housing crisis.

  • Reality conscious Salt Lake City, UT
    April 4, 2012 1:29 a.m.

    Speaking on facts and not assumptions, study shows that African Americans with far better credit score and job security than Whites were denied loans and African American homeowners who received sub-prime mortgage loans were more than 54 percent more likely to be issued a higher rate loan than Caucasian borrowers with the same qualifications. In fact, upper income African Americans are more than twice as likely to receive higher cost loans as their lower income White counterparts.

    The National Community Reinvestment Coalition study finds that discrimination against minorities persists in mortgage lending. The Federal Reserve Board, U.S. Department of Housing and Urban Development and the FDIC have all made similar observations.

  • U Student Y Fan Woods Cross, UT
    April 3, 2012 10:51 p.m.

    @Clue Bay

    My point exactly. If it is determined that African Americans were given higher interest rates than Caucasians with the same/similar credit history, I would certainly consider this to be racially motivated. However, if interest rates were truly based solely on credit factors, and African Americans on average just tend to have lower credit ratings, then maybe it is not the banks who deserve criticism. Either way, this is worth further examination.

    April 3, 2012 9:23 p.m.

    Could it be that a persons credit history and fiscal responsibility is the issue and really has nothing to do with race?

  • Reality conscious Salt Lake City, UT
    April 3, 2012 4:56 p.m.

    Instead of criticizing this article, I applaud the writer for taking the time to bring this to our attention on these banks predatory practices. The average White American has most of their wealth in the equity in their home, which they can use to take advantage of important opportunities. If African American’s do not have this opportunity because of discrimination, that dream remains a dream. What this article and the research that was done points out is that African Americans who were discriminated against, do not have this opportunity. Not because they are poor but when you look at history, you see a history of oppression, a history of slavery, a history of de facto discrimination, and a history where it's been difficult for Blacks to take the little income they've had to create wealth. When they apply for these loans, they are discriminated against. What they need to do is just Stop discriminating.

  • U Student Y Fan Woods Cross, UT
    April 3, 2012 12:27 p.m.

    Without any indication of the borrower's credit situation, this may not tell the whole story. African Americans are statistically more likely to be poor, so it is conceivable that these interest rates could have been based entirely on factors unrelated to race. That being said, this certainly looks bad.