Stella Adams, a housing advocate and retired chief of equity and inclusion for the National Community Reinvestment Coalition in Durham, North Carolina, called for “reparations in the form of affirmatively fair housing actions that would increase Black homeownership, through soft seconds on loans, allowing tenant ownership of multifamily housing, enforcing Section 3, and supporting local Black businesses through contracts and grants.“

A study released Wednesday by the National Community Reinvestment Coalition on the PPP, criticized using banks as the conduits for the loans and that African Americans with similar or better financial profiles than whites were still less likely to be approved for the funds.

The study, conducted by the National Community Reinvestment Coalition, found that when black and white applicants with similar credit characteristics applied to a lender, 43% of white applicants were treated more favorably than their black counterparts.

The study by the National Community Reinvestment Coalition used a match-pair “mystery shopper” test, where a Black and a White applicant with nearly identical business profiles and strong credit histories would contact the same bank. In 27 of the 63 cases, White business owners received more favorable treatment than the Black business owners.

“It shows that borrowing while Black is still a hazard,” said Jesse Van Tol, the CEO of the NCRC, the study’s sponsor.

Several companies within the industry, including the American Banking Association, the National Community Reinvestment Coalition and the National Housing Conference, expressed concern about data collection challenges and the effect they would have on lower-income communities.

Until 2010, it was prohibited to collect gender and demographic data for small business loans, said Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC), an association of community-based organizations around the country whose work champions fairness in housing, banking and business.

“The OCC went against the majority of public comments and introduced new, gaping loopholes into the rules that will allow banks to reduce their focus on lower-income borrowers and communities: the very communities the law was intended to protect,” said NCRC’s Jesse Van Tol.

New research suggests that Black business owners seeking PPP loans are treated less favorably than white applicants. The study, conducted by the National Community Reinvestment Coalition, used match-paired testers, a common method for showing discrimination in housing, lending and employment.

“It shows that borrowing while Black is still a hazard,” said Jesse Van Tol, the CEO of the NCRC, the study’s sponsor.

“These differences in treatment between white and Black testers are particularly troubling because the combined effect of these various differential treatments may lead to feelings of discouragement and despondency among minority entrepreneurs in the financial marketplace,” the researchers wrote.

A nonprofit sent Black and white “mystery shoppers” to branches of 17 banks, where they asked for loans under the Paycheck Protection Program. White customers got better treatment.

“The tests show that old patterns of systemic discrimination in lending didn’t magically disappear when banks made PPP loans,” said Jesse Van Tol, CEO of NCRC. “Banks still have a long way to go to root out discrimination, and clearly they need better training for their employees and more testing to create internal checks and internal pressure to drive out racist practices.”

Cities could also take action by revising their zoning policies to promote more diversity and inclusion, said Jesse Van Tol, CEO of the National Community Reinvestment Coalition.

McMorris, a Washington, D.C.-based real estate developer and civil rights activist, has formed a new property redevelopment firm meant to right the wrongs of redlining, in partnership with the National Community Reinvestment Coalition.