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Daily Real Estate News | January 27, 2004
Watchdog Group Accuses National City of Predatory Lending
The New York consumer watchdog group Inner City Press/Fair Finance Watch has accused National City of predatory lending and asked the Federal Reserve Board to approve the Cleveland-based banking company's planned acquisition of St. Louis-based Allegiant Bancorponly on the condition that it offer more low-cost loans to minorities.
Inner City Press says National City made a total of 679 conventional home purchase loans in Cleveland in 2000, but only 40 went to African Americans and nine to Hispanics; while its subprime mortgage lending subsidiary made 80 loans to blacks and five to Latinos.
"Among these three groups [whites, blacks, and Hispanics], 23.7 percent of NatCity's First Franklin's higher-cost loans were to African Americans, while only 5.5 percent of NatCity's normal cost loans were to African Americans," according to its complaint.
The Federal Reserve could make its decision as early as this week.
Source: Crain's Cleveland Business (01/26/04); Stacklin, Jeff
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