The Hill: ‘New’ tech lending: Opening financial products to underserved communities

The Hill, March 17, 2021, ‘New’ tech lending: Opening financial products to underserved communities 

Like most Americans across the country, the Latino community and communities of color are ready to move on from the economic devastation of the COVID-19 pandemic. However, as the media has consistently reported, communities of color have felt the brunt of the pandemic and need immediate access to stimulus assistance and emergency financing.

An Urban Institute report pointed out, “Hispanics are the fastest-growing U.S. demographic… accounting for 40.4 percent of growth in household formation” over the past 10 years. During the same time period, nearly 52 percent of homeowners in the U.S. were Hispanic. And, prior to the pandemic, a report from the National Community Reinvestment Coalition indicated that Latinos primarily sought loans to buy homes yet were underserved by banks.

The pandemic has disproportionately impacted the Latino economic health and the community will need public and private sector solutions to regain its economic stability. The goal after the pandemic is not just to avoid a housing crisis, but to expand financing option availability and eliminate mortgage financing disparities.

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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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