Global lender Santander Bank has been accused by an industry reform group of discriminatory lending practices toward borrowers of color, low-income borrowers, and women.
“[A]nalysis of the bank’s Home Mortgage Lending Act data reported each year to federal regulators reveals a disturbing pattern of racial and economic discrimination in Santander’s home mortgage lending,” a report from the Committee for Better Banks (CBB) said.
The CBB — a coalition of bank workers, community and consumer advocacy groups, and labor organization — studied government data on all mortgage lending in ten metropolitan areas in the northeast U.S. for 2014 and 2015. This includes over 9,787 home loan purchase loan applications and over 7,685 loan originations at Santander.
In 2014, Santander denied more than 26% of borrowers of color a mortgage loan, compared to an aggregate 17% denial rate by other banks in the same locations, the CBB analysis said.
During that same year, the bank denied nearly 30% of low-income borrowers a mortgage loan, compared to an aggregate 18% denial rate by other banks in same locations.
“In 2014 and 2015, Santander denied 24.9% and 20.6%, respectively, of African American borrowers,” the CBB said.
Four metropolitan areas stand stood out with “substantial problems” in the bank’s lending to low-income and communities of color, as well as to individual borrowers belonging to a protected class, CBB said:
- Philadelphia, Penn.: In low-income communities, Santander denied 37% of borrowers, compared to the market denial rate of 15% in 2015. That same year, Santander denied 32% of women borrowers in the city, which was 21% above other banks’ denial rate for women
- Worcester, Mass.: In communities of color, Santander denied twice as many people as other banks. In 2014, Santander denied 50% of borrowers in communities of color. In 2015, the bank denied 40% of borrowers in communities of color
- Hartford, Conn.: For every white borrower denied in 2015, Santander denied at least four Latino borrowers
- Camden, N.J.: In 2015, Santander originated 20% fewer loans for African Americans compared to other banks in the city. For every white borrower denied a mortgage loan, Santander denied about three African American borrowers in 2014 and 2015
A Santander spokesperson said the bank has "serious questions about (the report’s) accuracy," Reuters reported.
Santander's Ann Davis said the main data source, disclosures that lenders file under the Home Mortgage Disclosure Act, "does not reflect many important factors that all financial institutions consider when reviewing loan applications, including the borrower’s amount of debt and credit history.”
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