Banks Under Fire for Alleged Unequal Lending Practices
The practice of red lining were denying financial and other services to people based on race, was outlawed in nineteen, sixty eight, but last week several Chicago Chase Bank branches closed temporarily as protesters call for racial equity and lending from the nation's largest bank and expose published in early June by nonprofit newsroom city bureau and WBZ radio found that off the seven and a half billion dollars in Chicago home. Purchase loans approved since two thousand, twelve, less than two percent was loaned in black majority neighborhoods. The bank is also the subject of a Federal Class Action Lawsuit. That suit alleges that chase shutout. Business. Borrowers from the paycheck protection, program or PCP. Stacey Hawkins Armstrong's the founder of shop. poppin gourmet. Popcorn in Westchester. She told news station ABC seven Chicago the. She tried to file her PP loan application with chase. On the first day. They were accepted, but she got nothing but error messages desperate to keep her doors open and her four employees on payroll. She ultimately secured a smaller loan through a different bank. She believes that chase prioritized. It's favored customers and left small businesses like hers in. In the cold, She's not alone the US. House of Representatives is launching probes into how several banks including J. P.. Morgan Chase Bank of America and Citigroup made P P P loans according to the Orange County Register. Critics allege that big banks service business customers and Shutout underserved borrowers from the funding pool. redlining continues in subtle ways today, including in how P P P loans. Loans were distributed according to Everett. Sand CEO of small business lender lend Distri in a report in fortune as business wars daily reported earlier this month. The Small Business Administration gave no guidance to lenders to prioritize underserved communities about ninety percent of black owned businesses have no employees ease sands, says P, P P rules. Regarding sole proprietors came out last that let these entrepreneurs unclear about. About which loans were available to them? The SBA hasn't released the demographics of WHO received PPP loans, but a survey report by color of change and UNIDOs US is revealing more than half of black and Latin next small business owners who sought assistance requested less than twenty thousand dollars in funding only about one in ten received the funding. They ask for according to the report. One united the nation's largest blackout bank has been working to help black owned businesses get better access to loans in the second round of stimulus funding, federal government allowed thirty billion dollars to smaller and minority owned banks such as community development, financial institutions were CDFI's one united secured some of that funding with that on April. Twenty nine, the bank launched its own P. Program. The bank committed to lending to black owned businesses and self-employed people. It's I. P P Loan, went to an uber driver. Time will tell who was more effective in getting money to black owned businesses, but the stakes couldn't be higher. A recent report by the Brookings Institution Warns Covid. Nineteen could wipe out a decade of economic gains by black owned businesses as Congress debates whether create another stimulus round. The future of many black owned businesses hangs in the balance.