The Color of Law

These discriminatory practices were widespread throughout the industry at least since the late 1990s, with little state or federal regulatory response. Data on lending disparities suggest that the discrimination was based on race, not on economic status. Among homeowners who had refinanced in 2000 as the subprime bubble was expanding, lower-income African Americans were more than twice as likely as lower-income whites to have subprime loans, and higher-income African Americans were about three times as likely as higher-income whites to have subprime loans. The most extreme case occurred in Buffalo, New York, where three-quarters of all refinance loans to African Americans were subprime. In Chicago, borrowers in predominantly African American census tracts were four times as likely to have subprime loans as borrowers in predominantly white census tracts.