Banks and mortgage companies in the Baltimore area rank 12th among the nation's top 20 cities in lending money to minorities.
The finding was revealed yesterday at a special hearing of the City Council, which has expressed concern about the lack of small business and mortgage lending for minority and low-income populations in Baltimore.
John E. Taylor, president of the National Community Reinvestment Coalition, told council members that Baltimore banking institutions should rank higher.
A majority of Baltimore residents -- 60 percent -- are African-American, according to 1990 U.S. Census figures.
"If I lived in Baltimore, I'd want to be closer to the top," Taylor said. "What [banks] need to do is hire more people of color and open more branches in minority neighborhoods."
Taylor's testimony came in a three-hour hearing exploring the impact of the federal Community Reinvestment Act of 1977. The law was enacted to ensure that minority communities were not discriminated against in lending, a practice known as "redlining."
Council President Lawrence A. Bell III called the hearing after receiving complaints by minority business owners, who said they were being boxed out of small business loans. The large number of mergers and buyouts in the banking industry has resulted in branch closings and decreased banking services in many urban neighborhoods, Bell said.
"It takes money to go into business," Bell said. "The issue of access to capital isn't the only issue, but it's a major issue."
Bell expressed concern about the rise in the number of pawn shops and check cashing outlets in troubled Baltimore neighborhoods. The increase of those businesses shows that the poor are relying on "predatory" lenders to survive, he said.
Taylor provided council members with a ranking of area banks and how well they scored in providing loans to minorities. But banking industry leaders questioned the ranking, noting that many of the loans to troubled neighborhoods are directed through economic agencies such as the Baltimore Economic Development Corp.
NationsBank, which has its mid-Atlantic headquarters in Baltimore, announced yesterday that it will pour $350 billion into community redevelopment programs over the next 10 years.
John B. Bowers Jr., executive director of the Maryland Bankers Association, pointed to the NationsBank announcement as an example of how banks are more committed to establishing stronger lending in minority neighborhoods.
"The large banks operating in Baltimore have exceeded or met all of their federal requirements," Bowers told council members.
Bell said he intends to hold several hearings on minority lending, hoping to spark more investment in small minority businesses and troubled neighborhoods.
"What we want to come out of all this is a covenant that we hope will raise the level of home ownership and the level of business ownership in Baltimore City," he said.
Pub Date: 5/21/98