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American Banker: Financial market regulators can do more to tackle racial economic inequality

American Banker, June 29, 2022, Financial market regulators can do more to tackle racial economic inequality

What many people may not fully appreciate is that financial regulators, who can promote access to lending, capital, and other financial services, have an important role to play — indeed, often an affirmative obligation to act — in addressing racial economic inequality. That inequality has become entrenched in our financial and economic systems through centuries of brutality and discrimination. Solving the problem will therefore require many different strategies. Among them are a number of important actions that financial regulators can take in the near term.

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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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