Next City: Economics in Brief: Small Businesses Happy With PPP Loans from CDFIs

Next City, February 5, 2021, Economics in Brief: Small Businesses Happy With PPP Loans from CDFIs

Small businesses that received Paycheck Protection Program loans from community development financial institutions graded those lenders well for customer satisfaction in a new Federal Reserve survey of 15,000 businesses, American Banker reports.

White small business owners that contacted a bank or financial institution about modifying a small business loan or business credit card were more likely to receive a modification than Black or Latino small business owners who initiated the same process, the National Community Reinvestment Coalition found.

NCRC recommended that banks “not wait for consumers to initiate contact, as not all consumers know what options are available.” They also suggested reviewing their records on loan modifications to ensure that their modification policies and practices were not violating fair lending rules.

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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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