New Research Shows Blacks and Other Minorities Receive Unequal Mortgage Services

A new study conducted at the Ross School of Business at the University of Michigan finds that Black and other minority customers experience inferior and possibly unfair service from retail banks on mortgage products.

Researchers analyzed data from the Consumer Financial Protection Bureau, which collects consumer complaints against banks. They found that complaints on mortgage deals were significantly higher in zip codes with lower education rates and incomes. Even after controlling for income and education, complaints were still higher in zip codes with a significant minority population. The effect increased exponentially as the minority population rose.

The data suggests not enough thought goes into understanding customers in low-income and minority markets, the researchers say. As a result too many customers in those areas wind up with loans that aren’t a good fit.

“We’re not saying banks get together and decide to sell poor people and minorities bad products, but those populations are seeing worse outcomes and we need to find out why,” says Amiyatosh Purnanandam, a professor of finance at the University of Michigan and a co-author of the study. “The policy takeaway from our research is that we need to start thinking about quality based regulations.”

The paper, “Color and Credit: Race, Regulation, and the Quality of Financial Services,” may be accessed here.

Related Articles


  1. None of us should be surprised at this. The recent Presidential election rhetoric clearly showed how many in our country feel about minorities. Why should we expect better from the mortgage industry?

Leave a Reply

Get the JBHE Weekly Bulletin

Receive our weekly email newsletter delivered to your inbox

Latest News

Three African Americans Appointed to New Academic Positions

Leon Prieto, Kofi Afrifah, and Andrea Moore have been appointed to new academic positions at Clayton University, Bowie State University, and Savannah State University, respectively.

Historic HBCU Landmark Revitalized Through National Park Service Grant

Through three restoration grants totaling $2 million, the Rosenwald Practice School and Principal House will be fully restored, becoming the new home for the Northeastern North Carolina African American Research and Cultural Heritage Institute.

Five Black Leaders Appointed to Administrative Positions

Here is this week’s roundup of African American who have been appointed to new administrative positions at colleges and universities throughout the United States. If you have news for our appointments section, please email the information to

North Carolina A&T University Establishes Research Partnership with Collins Aerospace

“There are direct relations to the research we do in the College of Engineering and the mission purpose of Collins Aerospace,” said Stephanie Luster-Teasley, interim dean of the College of Engineering at North Carolina A&T State University. “Being able to partner with Collins really gives our students the opportunities for hands-on research at each level – undergraduate and graduate.”

Featured Jobs