Santander Bank disproportionately denied mortgages in low-income communities and to female and minority applicants, according to a study compiled by an advocacy group.
The report was released last week by the Committee for Better Banks, a self-described “coalition of bank workers, community and consumer advocacy groups and labor organizations coming together to improve conditions in the bank industry.”
The study covers 10 metropolitan areas in the U.S. Northeast where Boston-based Santander Bank does business, including two Pennsylvania cities: Philadelphia and Reading.
The bank denied 26 percent of loan requests from Latinos, African Americans and “other borrowers of color” in 2014 in those areas, compared to an aggregate 17 percent denial rate from other banks in the same locations, the study says, citing federal Home Mortgage Lending Act data. The bank also allegedly denied loans to nearly 30 percent of low-income applicants, according to the study, whereas other banks had a denial rate of 18 percent.
The study points to the Philadelphia area as one of four regions with substantial problems in this regard. Santander denied mortgages to 37 percent of low-income borrowers in that area in 2015, well above the 15 percent market denial rate. It was also 11 percent more likely than other banks in the market to deny mortgages to women, according to the study.
Santander has expressed “serious questions” about the report’s accuracy, with spokeswoman Ann Davis telling Reuters the data used “does not reflect many important factors that all financial institutions consider when reviewing loan applications, including the borrower’s amount of debt and credit history.”
Santander Bank, a subsidiary of the Spain-based Santander Group, operates hundreds of branches throughout the Northeast United States, including roughly 40 in the midstate.
It settled a $1.3 million suit alleging similar discrimination in 2014 in Providence, Rhode Island when the city accused the bank of reducing lending to Hispanic and African American applicants, even as it increased loans to white borrowers.