NYS investigation reveals racial gap in Buffalo mortgages

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A New York State survey of mortgage lenders in the city of Buffalo found that these companies preferred white applicants over those seeking to live in neighborhoods populated primarily by people of color, according to a report on the. survey released Thursday.
The practice, called “redlining,” has been illegal for decades, but investigation found it was not uncommon in the city of Buffalo, where white owners outnumber those of color.

Loans to minorities in the Buffalo MSA represent only 9.74% of total loans to Buffalo – less than half of what would be expected given that minorities make up about 20% of the MSA population.
NYS Div. financial services

The State Financial Services Department, the state banking and insurance regulatory agency, has found the practice to be particularly egregious among non-depository lenders, which are lenders who do not provide services. banks, so they are not considered to be banks.

Linda Lacewell, the agency’s superintendent, said the report’s findings were “particularly disturbing” but could provide a path for legislative action.

“Homeownership is a critical path to wealth creation and economic stability, and the data is clear – families of color, especially African Americans, do not have equal access to mortgages at home. Buffalo versus white households, ”Lacewell said.

According to the agency, only 9.74% of loans made in the Buffalo area have gone to people of color, who make up about 20% of the metro area’s population.

The trend was worse for non-depository institutions. These companies made only 3.7% of their mortgages in majority minority neighborhoods, while depository companies made 5.05% of their mortgages in these communities. Either way, it’s not proportional to the population.

Credit NYS Financial Services Division

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The agency recommended in the report that the state legislature amend what is known as the Community Reinvestment Act to apply to non-depository lenders. The law, which currently only applies to full-fledged banks, requires institutions to clearly define their entire service area.

The state is also asking the federal government to look into federally regulated financial institutions for fair loan violations in Buffalo. Some financial institutions are licensed by the state, while others are licensed by the federal government.

The DFS is also returning the report to the state’s State Department to investigate real estate agents that non-depository lenders relied on for their business in Buffalo. That way the state can see how they fit into the disparity.

Governor Andrew Cuomo proposed legislation this year to limit redlining in communities of color by offering more help to mortgage applicants in those neighborhoods, as well as state-sanctioned loans.

NOTE: “Can Ox overcome his racial actions?” The answer is not in black and white ”by WBFO’s Marian Hetherly is cited twice in the state report.

Albany reporter Dan Clark is the producer and host of New York Now on WNED PBS Sundays at 9:30 a.m. and a regular contributor to WBFO.org.

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