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NYS investigation shows only 9.74% of loans in Buffalo made to minorities

Gov. Cuomo announced Thursday that an investigation into redlining revealed that loans made to minorities are only half of what should be expected.
Credit: wgrz

BUFFALO, N.Y. — The illegal practice of redlining, where loans are given or business is done in a discriminatory way due to the racial composition of a neighborhood, has long been a concern in the City of Buffalo. 

The results of an investigation done by the New York State Department of Financial Services shows troubling practices still happening in Buffalo decades after redlining was banned. 

According to the report, loans given to minorities made up only 9.74 percent of loans made in the Buffalo region. The state says this is less than half of what should be expected in an area where minority populations make up about 20 percent of the metro area. 

Additionally, Governor Andrew Cuomo's office says the report showed that nonbank mortgage lenders investigated made "little to no effort to do business in majority-minority neighborhoods," were not tracking how well they are serving people of color, and that this type of lender lent at a lower rate in these neighborhoods. 

"Underserved communities, especially families of color, continue to face housing discrimination, in the form of limited access to mortgage lending, facing a roadblock to achieve the American dream," Governor Cuomo said.

Redlining practices gravely impacted who lives where in Buffalo: the state says that 85 percent of people who identify as Black live east of Main Street. Those neighborhoods are the same ones that were redlined in the 1930s.

 "The report reaffirms the importance of the State of the State proposal to increase access to mortgage loans to close the racial wealth gap to help us build back better for a fairer New York."

The report also calls for legislative changes at the state level, including changing New York's Community Reinvestment Act to cover nonbank mortgage lenders, which currently only covers banks. The report also calls on the federal government to look at national banks and see if they are engaged in fair lending violations, since the state could not investigate federally-regulated banks. 

"We now have the opportunity to right some of the wrongs of the past by looking at the entire problem and formulating solutions so the legacies of segregationist policies do not continue into the future," Superintendent of Financial Services Linda A. Lacewell said.