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Although lending to minorities and lower income families has increased, the gap between minorities who are rejected for home loans and whites who are rejected has grown wider, according to a study released Wednesday.
The study by the Association of Community Organizations for Reform Now (ACORN), which was based on 2003 data, indicates a trend toward parity in lending since 1993 has been reversed in recent years.
According to ACORN, African-Americans were 2.2 times more likely than whites to be denied when applying for a conventional loan in 2003. That's the same rate as 1993 and an increase from 1998 when blacks were 1.8 times more likely than whites to be denied.
Latino loan applicants were 1.6 times more likely to be rejected last year, up from 1998 when they were 1.4 times more likely to be denied. In 1993, an ACORN study found Latinos were 1.7 times more likely to be denied.
Even upper-income African-Americans were more than twice as likely to be turned down than upper-income whites, the analysis said.
"Although lending to minorities and lower income families has increased, it is still at low levels compared to their share of the population and the quality of these loans has changed," ACORN said in a statement.
In the Tampa Bay metropolitan area, African-Americans were two times more likely to be denied a conventional loan than whites while Latino applicants were 1.8 times more likely to be rejected. For African-Americans, that's a slightly decrease from 1993, when the disparity ratio was 2.1, but up from 1998 when the ratio was 1.7. For Latinos, the denial rate was up from 1993 and 1998, when they were 1.6 times more likely to be denied than whites.
Pam Ricco, spokeswoman for the Florida Bankers Association, said she could not respond to ACORN's findings without reviewing the report and the group's methodology.
Bankers review loans on a case by case basis and could have numerous reasons for rejecting one, Ricco said. "There's so many factors that go into loan approval. Race is certainly not one of them."
The release comes less than a week before the Federal Deposit Insurance Corporation closes the comment period on changes to the Community Reinvestment Act that critics say will greatly weaken its effectiveness.
The 37-year-old law is a tool for urging banks to meet credit needs in communities they serve. Regulators review compliance and minority lending records through regular CRA reviews. ACORN and others are opposed to an FDIC plan that would free smaller banks from the onus of a full CRA exam.
ACORN's release, with heavy political undertones, also comes less than three weeks before the presidential election. ACORN officials said they gave President Bush and his Democratic challenger, Sen. John Kerry, a chance to respond to their findings. Only Kerry responded, the group said, criticizing the Bush administration for efforts to weaken the Community Reinvestment Act.
Jeff Harrington can be reached at harrington@sptimes.com or 813 226-3407.