Banks Treat White Business Owners Better than Business Owners of Color

Black and Hispanic men seeking small business loans face more scrutiny and worse treatment from bank officers than less qualified white men, the Washington Post reports, citing a new study by the National Community Reinvestment Coalition.

 

The study also found that government-backed lending to black business owners dropped from 8% to 3% of small-business loans between 2008 and 2016.

 

To evaluate customer service interactions with small business lending representatives, NCRC sent white, black and Hispanic “mystery shoppers,” who acted as prospective borrowers at 60 Los Angeles area banks. The testers had nearly identical business profiles and strong credit histories, with black and Hispanic testers possessing slightly better incomes, assets and credit scores than their white counterparts. However, by almost every measure, white testers received superior customer service, the study found.

 

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