Amid a long stretch of boarded-up store fronts in the Baden neighborhood, a coalition of equal-housing advocates rallied on July 19 to decry mortgage lending disparities in the St. Louis region.
In neighborhoods like Baden – where the population is 75 to 98 percent black – less than one percent of homes received a home purchase loan between 2012 and 2014, according to the study released on July 19 by the National Community Reinvestment Coalition (NCRC) and the St. Louis Equal Housing and Community Reinvestment Coalition (SLEHCRA).
“If families don’t have access to credit, then they aren’t able to build wealth to reinvest in their neighborhoods,” said Elisabeth Risch, co-chair of SLEHCRA. “Financial institutions like banks aren’t investing in the neighborhoods, and that leads into a cycle if divestment.”
The coalition chose to gather at the corner of the Broadway and Halls Ferry because at that intersection one can see a rent-to-own facility surrounded by boarded-up buildings.
“These represent things that strip wealth from our communities,” Risch said, “that are disproportionately targeting communities of color and representing that there are not mainstream financial services.”
There’s no bank that will provide checking accounts nearby and, most importantly, families don’t have access to mortgage credit, she said.
“The report finds that race is a significant factor, especially in the City of St. Louis, in determining where mortgage loans and home purchase loans are being provided,” Risch said.
In the study’s regional map that marks the locations of home-purchase loans with dots, North St. Louis and much of North County are literally void of any dots. While African Americans represent 18 percent of the region, they only represent four percent of the home lending, Risch said.
“The history of redlining and discrimination still exists today,” said Jacqueline Hutchinson, co-chair of SLEHCRA and board chair for the Missouri Consumers Council.
Since 2009, Hutchinson said the region has seen some progress.
“However, this report is an indication that that is not enough, and there is still work to be done,” Hutchinson said. “Locally, we’re calling for banks to create innovative products that provide access to banking in low-income areas.”
In 2009, SLEHCRA accused Midwest BankCentre of “redlining,” or withholding home loans, from neighborhoods often considered poor economic risks. The alliance took the allegation to the U.S. Department of Justice (DOJ), which ordered the bank in 2011 to invest $1.45 million in a majority African-American area.
Since the settlement, the bank has embraced its role in the North County community. In a past interview with The St. Louis American, Midwest BankCentre Chairman and President James A. Watson said that it was a considerable investment that they probably wouldn’t have made as quickly if it had not been for the settlement.
Hence, the bank opened the Pagedale location in November 2012. It was the first bank established in the City of Pagedale, a majority African-American community, Watson said, and after two years, the location has already turned a profit. That’s two years earlier than the normally expected five-year mark, he said.
This April the bank broke ground on an expansion in North St. Louis on the campus of Friendly Temple Missionary Baptist Church. “This is the first step toward getting rid of predatory lending by giving people access to fair and safe financial products and services,” St. Louis Treasurer Tishaura O. Jones, a member of Friendly Temple, said at the groundbreaking.
The bank offers several loan products for residents who are working to improve their credit scores. Many equal-housing advocates see Midwest as model for what other banks can do in the region.
“Until our financial institutions make a full and genuine commitment that creditworthy borrowers, regardless of their skin color, will be able to access responsible credit, the economies in these neighborhoods will continue to deteriorate,” said John Taylor, president and CEO of the National Community Reinvestment Coalition, “and we will continue to have the circumstances you see in St. Louis, Baltimore and elsewhere.”
