Data Drives the Movement for Economic Justice! Archana Pradhan, Senior Research Analyst, NCRC. March 20, 2013

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1 Data Drives the Movement for Economic Justice! Archana Pradhan, Senior Research Analyst, NCRC March 20, 2013

2 Why data? 2 To uncover the trend Ø Who is lending in your community? Ø Are they equitably originating mortgages throughout your community? Ø Is the institution s mortgage pricing non-discriminatory? Affecting Policies & Procedures Ø Commenting on CRA exams and merger applications Ø Increase lending to minorities, women, and low- and moderateincome borrowers Ø Help lenders identify emerging markets and reduce lending disparities

Ø Is the institution s mortgage pricing non-discriminatory?

3 3 Publically available data HMDA data Small Business data Bank Branch data

4 4 HMDA data The Home Mortgage Disclosure Act (HMDA) was passed by Congress in 1975 and the rule-writing authority was transferred to the Consumer Financial Protection Bureau (CFPB) in This regulation has three purposes: 1) Help determine whether financial institutions are serving the housing needs of their communities 2) Assist public officials in distributing public-sector investment so as to attract private sector investment to areas where it is needed 3) To assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes.

This regulation has three purposes: 1) Help determine whether financial institutions are serving the housing needs of their communities 2)

5 5 What is in the HMDA Data? Loan Information Ø What action was taken on the loan application Ø Info on pre-approval and denial Ø Dollar amount of loan Ø Loan type Ø Purpose of loan Ø Pricing data for high-cost loans Ø Lien status is indicated Ø Purchasers of loans Ø Reporting if loans are covered by HOEPA Ø Reporting institution

pre-approval and denial Ø Dollar amount of loan Ø Loan type Ø Purpose of loan Ø

6 6 HMDA Data-After Dodd-Frank bill Ø Age of borrower Ø Credit score Ø Property value Ø Total points and fees paid at origination Ø ARM- by term in months for any introductory period after which rate changes Ø Negative amortization - Any terms allowing borrower to make payments that are not fully amortizing Ø Channel through which application was made, including retail, broker, and other categories Ø And more.

Ø Negative amortization - Any terms allowing borrower to make payments that are not fully amortizing Ø

7 7 How to get HMDA Data? Ø Ø HMDA data (for calendar years ) available on the Federal Financial Institutions Examination Council (FFIEC) web page HMDA data can be pulled in 3 ways: 1) All Lenders Aggregates by MSA 2) Individual Lender Disclosures by MSA 3) All Lenders National Aggregates

Financial Institutions Examination Council (FFIEC) web page HMDA data can

8 Where to Get HMDA Ø Step 1: Go to the FFIEC website: 8

9 Ø Step 2: Click on HMDA, then on Aggregate Report (left hand side menu) 9

10 Ø Step 3: From the scroll-down menu, select a state: e.g., Virginia (VA) " Ø Step 4: From the scroll-down menu, select a MSA: e.g., Washington-Arlington-Alexandria "

11 Ø Step 5: Click on Select MSA button to retrieve tables" 11

12 Ø Step 6: Choose type of report: e.g., Conventional Home-Purchase Pricing Info First " 12

13 Ø Example: Table Home Purchase Lending in Washington-Arlington-Alexandria MSA % 60% 50% 52.6% 60.6% % 30% 20% 10% 0% 29.8% 13.1% 6.1% 5.1% 8.7% 3.2% Asian Black Hispanic White Population Percent Home Purchase Loan Percent

13 1041 70% 60% 50% 52.6% 60.6% 12404 40% 30% 20% 10% 0% 29.

14 Application of HMDA Data: San Diego MSA, CA, % Graph 1: Percent of loans to African American 1.9% 1.8% 20% Graph 2: Percent of Loans to La<nos 18.3% 1.5% 15% 15.0% 1.0% 1.1% 10% 10.0% 6.2% 0.5% 5% 0.0% Bank of America All Lenders Union Bank 0% % of Households Bank of America All Lenders Union Bank 25% 20% 15% Graph 3: Percent of loans to LMI Borrowers 22.6% 17.2% 14.5% 30% 25% 20% 15% Graph 4: Percent of loans to Minority Neighborhoods 26.3% 26.3% 20.9% 10% 10% 8.0% 5% 5% 0% Bank of America All Lenders Union Bank 0% % of Owner occupied units Bank of America All Lenders Union Bank

0% Bank of America All Lenders Union Bank 0% % of Households Bank of America All Lenders Union Bank 25% 20% 15% Graph 3: Percent of loans to LMI

15 Distribution of All Branches and Prime Loans, by Census Tract Minority Percent, San Diego, CA, 2011 Distribution of All Branches and Prime Loans, by Census Tract Income Category, San Diego, CA, 2011 (1 Dot = 5 Loans) (1 Dot = 5 Loans) Number of Branches=768 Number of Loans=74,096 Number of Branches=768 Number of Loans=74,096

Income Category, San Diego, CA, 2011 (1 Dot = 5 Loans) (1 Dot = 5 Loans) Number

16 Distribution of Bank of America Branches and Prime Loans, by Census Tract Minority Percent, San Diego, CA, 2011 Distribution of Union Bank Branches and Prime Loans, by Census Tract Minority Percent, San Diego, CA, 2011 (1 Dot =1 Loan) (1 Dot =1 Loan) Number of Branches=74 Number of Loans=6,040 Number of Branches=60 Number of Loans=801

by Census Tract Minority Percent, San Diego, CA, 2011 (1 Dot =1 Loan) (1 Dot =1

17 Distribution of Bank of America Branches and Prime Loans, by Census Tract Income Category, San Diego, CA, 2011 Distribution of Union Bank Branches and Prime Loans, by Census Tract Income Category, San Diego, CA, 2011 (1 Dot =1 Loan) (1 Dot =1 Loan) Number of Branches=74 Number of Loans=6,040 Number of Branches=60 Number of Loans=801

by Census Tract Income Category, San Diego, CA, 2011 (1 Dot =1 Loan) (1 Dot =1

18 Small Business Lending Data

19 19 About Small Business Data Data disclosure required by the CRA regulation Ø The Community Reinvestment Act (CRA) requires certain lending institutions to make annual public disclosures of their small business, small farm, and community development lending Before 2005, all banks with more than $250 million in assets required to report After 2005, the threshold was moved up to $1 billion in assets

their small business, small farm, and community development lending Before 2005, all banks with

20 About Small Business Data 20 Data exist: On a county level for individual lender by census tracts combined into income groups Ø Example: Bank A issued X number of loans in all LMI census tracts combined in B county On a census tract & county level for all lenders as a group Ø Example: All lenders combined issued X number of loans in a ABC census tract

all LMI census tracts combined in B county On a census tract & county level for all

21 What Is In the Small Business Data 21 # and $ of loans to small businesses: Ø By revenue size of the business Ø By the size of the loan Ø By the purpose of the loan origination (primary market) vs. purchase (secondary market) Ø To farms vs. non-farm small businesses Ø By the ownership status of the business (from NCRC) Ø By sector (from NCRC) Ø By size (number of employees) (from NCRC)

22 22 CRA Small Business Data Limitations No data available on: an individual census tract level for individual banks Ø Example: you cannot get a number of loans issued by Bank A in XYZ census tract on minority or gender of small business owner Ø Example: you cannot get a number of loans issued to female-owned businesses or businesses owned by African- Americans or Hispanics

23 Ø Step 1: Got to 23

24 Ø Step 2: Click on CRA, then National Aggregate Report 24

25 25 Ø Step 3: Choose type of report: e.g., Number of Business Loans by Neighborhood Characteristics

26 Example: Table 2-1. Small Business Lending by Income Level of Tract (National)

27 Application of Small Business Data: San Diego MSA, CA, % 5% 4% 3% Graph 1: Small Business Lending in Low- Income Census Tracts 4.3% 5.4% 3.3% 3.0% 25% 20% 15% Graph 2: Small Business Lending in Moderate-Income Census Tracts 18.4% 21.4% 21.3% 15.7% 2% 10% 1% 5% 0% Percent of Business US Bank All Lenders Union Bank 0% Percent of Business US Bank Union Bank All Lenders

28 Data on Bank Branches

29 29 Data on Bank Branches: How is Bank Branch Data Useful Ø Determine if branches are located in low-income and minority neighborhoods Ø Examine trend data Ø Leverage during bank mergers Ø Leverage during CRA Exam of banks Ø Fringe Banking (Check Cashers, Payday Lenders, Pawnshops, etc) exists in the absence of banks

30 Where to Get Branch Data Step 1: click on Analysts" Step 2: Click on Summary of Deposits 30

31 Step 3: Click on SOD Download 31

32 Obtaining Branch Data 32 AT A MINIMUM, MAKE SURE TO SELECT: Address City State ZIP

33 Step 3: Click on Download 33

34 Application of Branch Data San Diego MSA, CA, % Graph 1: Percent of Branches in Minority Neighborhoods 43.2% 40% 38.3% 38.2% 30% 20% 10% 0% Bank of America Union Bank All Lenders

35 35 NCRC Analysis vs. FFIEC Analysis NCRC* (using CRA Wiz*) Ø NCRC staff assists you. Typically 1-2 week turnaround. Ø We can pull home lending, small business lending & branching data Ø We can pull data by nation, state, county, MSA or census tract Ø We can provide spreadsheets, write ups, charts & maps using the data FFIEC Ø Do it yourself. You can pull the data up in minutes! Ø You can pull home lending & small business lending Ø You can pull home lending data by nation or MSA, or by county for small business data Ø You can create spreadsheets & write ups using the data Ø Customization of data is limited

36 36 To follow up with the speaker: Archana Pradhan, Senior Research Analyst" National Community Reinvestment Coalition (NCRC) (202) Presentations will be available at by March 29, 2013

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