Banking Deregulation and Discrimination in Mortgage Lending
33 Pages Posted: 9 Oct 2019
Date Written: September 28, 2019
This paper examines how interstate banking deregulation affects mortgage lending to minorities. I find that the mortgage approval rates for African Americans, compared with other borrowers, decrease after interstate banking deregulation. I also find that the effect is only present in out-of-state banks, but not in in-state banks or non-bank lenders, suggesting that the effect is driven by the strengthening of the bank balance sheet after deregulation, but not by the increased competition. Further analyses show that the effect is stronger for banks with weaker balance sheets before deregulation.
Keywords: Lending Discrimination, HMDA, Banking Deregulation
JEL Classification: G21, G28, J16
Suggested Citation: Suggested Citation