For Immediate Release-June 21, 2007
Contact: Emma Dixon, LCRC, 985-674-1551
(Cell phone 985-869-3584)
Christina Kasica, UFE, 617-423-2148, ext. 119
Kevin Cowl, NCRC, 202-464-2725
A joint Press Release from the Louisiana Community Reinvestment Coalition, the Louisiana Disaster Recovery Foundation, the Baton Rouge Branch of the NAACP, and the Urban Restoration Enhancement Corporation
New Report Highlights Lending Disparities and High-Cost Loans to Minorities in Baton Rouge Metropolitan Area
Data Shows Trend of Sub-Prime Loans to African-Americans
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Baton Rouge, La.- A new report finds that African-Americans in Baton Rouge were more than twice as likely to receive sub-prime home loans as non-minorities in 2005. The report is the second in a series of reports on Louisiana lending practices commissioned by the Louisiana Community Reinvestment Coalition (LCRC) and compiled by the National Community Reinvestment Coalition (NCRC) Research and Policy division.
In the United States as a whole, African-Americans received 46.55% of sub-prime loans, while in Baton Rouge that number is 53.66%. Small business loans went to only 19.52% of the 26.36% of small businesses located in Baton Rouge's minority census tracts in 2005.
20 percent of whites received sub-prime loans in Baton Rouge in the same period.
"As we examine this trend of lenders providing sub-prime, high-cost loans we must recognize that this is a negative factor in an effort to build prosperity in communities," said Emma Dixon, LCRC Project Director. "We need to advocate for new legislation and policy to prevent these practices. One example is the new Borrower Protection Act of 2007 sponsored by Sen. Chuck Schumer of New York."
"We are pleased that LDRF is engaged in supporting the work of LCRC and its efforts to ensure economic justice," said Ashley Shelton of LDRF. "We want local lenders to do more to provide affordable, equitable lending products and to minimize the large number of high-cost, sub-prime mortgages and small business loans to people of color and in minority neighborhoods."
Ronnie Edwards of Urban Restoration said, "The work of non-profit counseling agencies may not be emphasized enough. The role of pre-purchase counseling is paramount in ensuring there is full knowledge of the buying process."
"As we all work together to increase the quality of life in our city," said Lamont Cole of the Baton Rouge NAACP, "we need full support from the banking community. The report indicates that we have a way to go to achieve that."
A third report is being commissioned by the LCRC for other large metropolitan areas in Louisiana, and is expected to show that communities across the state need greater levels of investment by the financial industry. The LCRC and its partners hope these reports will encourage more lenders to commit to creating prosperity across Louisiana.
Mses. Dixon, Edwards and Shelton and Mr. Cole are available for interviews or background.
The LCRC is a joint project of Boston-based United for a Fair Economy (UFE) and the Washington, DC-based National Community Reinvestment Coalition (NCRC). UFE is a national non-partisan non-profit organization that spotlights the growing economic divide in the U.S. The NCRC is the nation's foremost trade association for economic justice, with over 600 members.