$1.2 million grant to investigate banking discrimination in small business lending

Washington, DC– A $1.2 million grant from the W.K. Kellogg Foundation to the National Community Reinvestment Coalition will support “mystery shopper” testing of small business lending practices at banks in three US metropolitan areas. The three-year grant funds investigations and training to educate both banks and borrowers about discrimination in small-business lending.

In 2017, NCRC’s Center for Civil Rights convened a team of experts in “mystery shopping” to test the small business lending practices of banks in two cities. The results of this pilot study were startling – bankers were three times more likely to invite follow-up appointments with white borrowers than better-qualified black borrowers. Banks were twice as likely to offer white entrepreneurs help with their small business loan applications compared to black entrepreneurs.

In 2018, with support from the W.K. Kellogg Foundation, NCRC will expand this research to three more cities. Research partners include Rutgers University-Newark, Utah State University and Brigham Young University.

“American culture has long celebrated hard work and entrepreneurship as the mechanism of the American Dream, but our research shows discrimination remains a daunting obstacle to minority and women business owners,” said John Taylor, President and CEO at NCRC. “Thanks to Kellogg’s generous support, we can expand our investigations, educate banks about practices they need to correct – and we can help borrowers and community groups work with banks to end discrimination and expand access to small-business loans.”

“We often talk about the American dream, but we have forgotten what it stands for,” said Stella Adams, Chief of Diversity and Inclusion at NCRC. “This grant gives us the opportunity to ensure this dream is truly attainable for all Americans regardless of race or gender.”

“For years, we’ve seen anecdotal evidence of discrimination in the lending practices of banks with small businesses, ” said Jerome Williams, Executive Vice Chancellor and Provost, Rutgers University-Newark. “Now with this larger scale study, we will apply the most rigorous scientific methods to validate anecdotal claims of the discrimination self-evident in small-business lending.”

“We cannot accept marketplace discrimination in small business lending,” said Dr. Sterling Bone, Associate Professor of Marketing at the Jon M. Huntsman School of Business at Utah State University. “We have the responsibility, as academics and public policy advocates, to discover and test solutions to eradicate these ills in our society and everyday lives. This grant will allow us to work toward solutions for the welfare of all.”

“Business and trade have powerful wealth-building effects on society when it’s a level playing field,” said Dr. Glenn Christensen, Associate Professor of Marketing at the Marriott School of Business at Brigham Young University. “Unfortunately, our early research in this area indicates that access to capital may be unequally distributed in our society, and capital is the lifeblood of industry. This grant allows us to investigate further, and create solutions for the unequal treatment of minority entrepreneurs across the financial marketplace.”

For media inquiries:

Jesse Meisenhelter




About NCRC
NCRC and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business.

About Kellogg
The W.K. Kellogg Foundation (WKKF), founded in 1930 as an independent, private foundation by breakfast cereal pioneer, Will Keith Kellogg, is among the largest philanthropic foundations in the United States. Guided by the belief that all children should have an equal opportunity to thrive, WKKF works with communities to create conditions for vulnerable children so they can realize their full potential in school, work and life. The Kellogg Foundation is based in Battle Creek, Michigan, and works throughout the United States and internationally, as well as with sovereign tribes. Special emphasis is paid to priority places where there are high concentrations of poverty and where children face significant barriers to success. WKKF priority places in the U.S. are in Michigan, Mississippi, New Mexico and New Orleans; and internationally, are in Mexico and Haiti. For more information, visit www.wkkf.org.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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