Fintech Leads the Way in Fair Lending Practices With a New Kind of ‘Relationship Banking’

Yahoo Finance, December 9, 2021, Fintech Leads The Way in Fair Lending Practices with a New Kind Of ‘Relationship Banking’

Up until fairly recently, getting a loan for your small business meant pleading your case at one of the banking behemoths, whose legacy of discrimination is well documented. A data analysis of lending practices from 2008-2016 from the National Community Reinvestment Coalition (NCRC) showed “a troubling pattern of disinvestment, discouragement and inequitable treatment for Black and Hispanic-owned businesses.”

Now, fintech firms are charting a new way forward, having built the importance of the client relationship into their ethos. They have married a seamless process with the personalized attention of a community bank. 

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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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