Updated: 04/10/2014 6:12 PM KSTP.com By: Naomi Pescovitz
A new report from the University of Minnesota Law School is taking aim at big banks saying they discriminate based on race. The report from the school's Institute on Metropolitan Opportunity says several companies are more likely to turn down black applicants for home mortgages.
"This is a problem. People that are getting good jobs and getting good educations and playing by all the rules should be treated the same. And that's part of the American dream," said Myron Orfield, Director of the Institute on Metropolitan Opportunity at the University of Minnesota Law School.
The study found that high income black applicants are less likely to get prime loans than low income white applicants. Between 2009 and 2012, 50 percent of black applicants were denied compared to 29 percent of white applicants.
The report also says racially diverse and mostly non-white neighborhoods are getting fewer loans. The Near North, Camden, Northeast and Phillips neighborhoods were hit hardest.
North Minneapolis homeowner Ruby Brown struggled to refinance her home mortgage before finally getting a new loan after years of back and forth.
"This whole country has been affected and hurt by the practices that have gone on, and more importantly, people, people have been hurt," Brown said.
The study says the biggest banks have the worst track records. Wells Fargo, the report said, made up a fourth of the lending shortfalls. U.S. Bank had the second most.
In a statement Wells Fargo said: "Wells Fargo has always been a leader in fair and responsible lending, and lending in all communities is a focus for our company. As a result, Wells Fargo is by far the largest mortgage lender in the Twin Cities; overall, in lending to borrowers representing all racial and ethnic groups, and in lending in diverse and minority communities."
U.S. Bank said: "U.S. Bank is committed to lending to all borrowers in all of the communities we serve, and we take our responsibility very seriously... In all cases, borrowers are judged solely and consistently on financial criteria and not on race. Qualified borrowers are receiving loans."
To read full statements from both companies, click here.
Find the full study here.