Inner City Press says Bank of America & Citigroup Discriminate Against Black & Latino Home Buyers
A New York-based community group on Monday accused Citigroup Inc. and Bank of America Corp. of charging higher rates on mortgage loans to black and Hispanic home buyers than to whites. The financial institutions countered that the data were flawed and that their loan policies are fair. The allegations by Inner City Press-Fair Finance Watch, a consumer advocacy group, were based on the first of a series of contentious reports made public by the government under the Home Mortgage Disclosure Act. HMDA requires financial institutions to report information on home loans priced above comparable Treasury rates. First-lien loans must be reported if they exceed the Treasury rate by 3 percentage points, and second mortgages by 5 percentage points. The Inner City Press said its analysis of data filed by Citigroup found that "African American borrowers are more than four times more likely to receive a rate-spread loan than white borrowers." It said that Hispanic borrowers "are more than six times more likely to receive a rate-spread loan from Citigroup than are non-Hispanic white borrowers." The group also said members of both minority groups were turned down for loans more frequently than whites. "The nation's largest bank, Citigroup is also its most disparate when it comes to confining people of color to higher-cost home purchase loans," said attorney Matthew Lee, the group's executive director. [more]