Santander U.S. mortgage data shows racial, economic discrimination -group

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By Lisa Lambert | WASHINGTON

WASHINGTON Outlets of Santander Bank,
already under fire for lending practices, denied mortgages to
women, minorities and low-income borrowers in the U.S. Northeast
more frequently than nearby banks, according to an analysis by
an industry reform group on Thursday.

The Committee for Better Banks, a coalition of bank workers,
consumer advocacy groups and unions, dug into government data on
home loans in the U.S. Northeast, including nearly 10,000
Santander home-purchase applications, and found “a disturbing
pattern of racial and economic discrimination.”

Santander denied more than 26 percent of borrowers of color
a mortgage in 2014, when other banks in the same locations only
turned down 17 percent in aggregate, according to the analysis.

It also refused loans to 30 percent of low-income
applicants, compared to the aggregate rate of 18 percent, and 20
percent of women, compared to the aggregate rate of 13.6

Meanwhile, in 2015, Santander rejected more than three
people of color for every white borrower it turned down.

A Santander spokesperson said the bank has “serious
questions about its accuracy.”

Santander’s Ann Davis said the main data source, disclosures
that lenders file under the Home Mortgage Disclosure Act, “does
not reflect many important factors that all financial
institutions consider when reviewing loan applications,
including the borrower’s amount of debt and credit history.”

The HMDA was passed in 1975 to shine a light on qualified
borrowers who could not get loans because of where they lived.

The analysis found some of the greatest discrimination in
four metropolitan areas: Pennsylvania’s Philadelphia,
Massachusetts’ Worcester, Connecticut’s Hartford and New
Jersey’s Camden.

In Philadelphia’s low-income neighborhoods, Santander’s
mortgage denial rate was 36.6 percent in 2015, more than twice
the aggregate rate in that market. That year in Hartford,
Santander denied at least four Latino borrowers for every white

In 2014 Santander settled a lawsuit with Providence, Rhode
Island, over alleged “redlining,” a practice in which a bank
limits lending in minority neighborhoods while increasing it in
predominantly white ones.

The Office of the Comptroller of the Currency will soon fail
Santander on a community lending test for doing too little to
reach poor neighborhoods, according to sources familiar with the

The bank, which is owned by the euro zone’s second-largest
bank by market value, Banco Santander, also recently flunked an
annual stress test meant to ensure it can withstand a financial
crisis without taxpayer help.

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