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#2231671 - 02/25/20 09:06 PM High Minority Census Tracts
Mel in WA Offline
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Joined: Mar 2013
Posts: 1,186
How do I figure out the high minority census tracts in my assessment area? Is there a database with this information?

Thanks!

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Fair Lending
#2231674 - 02/25/20 09:21 PM Re: High Minority Census Tracts Mel in WA
Skittles Offline
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Skittles
Joined: Sep 2002
Posts: 13,963
TN
The FFIEC contains FFIEC Census and Demographic Data. You can filter down by state, county, and census tract. It will disply the percentage of the minority population within each census tract.
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#2231695 - 02/25/20 10:54 PM Re: High Minority Census Tracts Mel in WA
Mel in WA Offline
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Joined: Mar 2013
Posts: 1,186
Found it - Is over 50% minority population considered "high"?

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#2231696 - 02/25/20 11:28 PM Re: High Minority Census Tracts Mel in WA
Rocky P Online
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Joined: Jun 2003
Posts: 7,425
Florida
>50% is considered a majority minority tract. >80% is considered a super majority (aggregate minorities)
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#2231721 - 02/26/20 01:47 PM Re: High Minority Census Tracts Mel in WA
Inherent_Risk Offline
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Joined: Jan 2017
Posts: 375
Assuming you're asking for general fair lending analysis, I would ask you examiner. Our examiners only consider census tracts that are majority black or hispanic to be "majority minority" for their analysis. There's a lot of ways you can slice the data. You want to be using the same methodology your examiners will be using.

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#2231760 - 02/26/20 05:46 PM Re: High Minority Census Tracts Mel in WA
Mel in WA Offline
Diamond Poster
Joined: Mar 2013
Posts: 1,186
Yes, I'm working on our fair lending analysis/risk assessment. I've identified all tracts in our assessment area that have a minority percentage above 80% and also above 50%. Now what? Should I identify how many loans were originated in these tracts? The only direction provided by the examiner was to "monitor lending distribution in high minority census tracts".

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#2231807 - 02/26/20 08:46 PM Re: High Minority Census Tracts Mel in WA
BoomCat Offline
New Poster
Joined: Jan 2016
Posts: 13
Indiana
Mel in WA - I'd check the number of applications taken as well, since that shows you are getting into the majority minority tracts - also check and see how close you have branches to those tracts, or if you take online applications. See if you have marketing about your loan products getting into those majority minority tracts ("MMTs") as well as any community outreach your bank may be doing. If you don't, you will probably need to expand your marketing and outreach in those MMTs, particularly if your apps and loans in those MMTs are low.

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#2231848 - 02/27/20 01:17 AM Re: High Minority Census Tracts Mel in WA
Rocky P Online
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Joined: Jun 2003
Posts: 7,425
Florida
Piggybacking on BoomCat, identify the penetration into your assessment area. If the bank does 2% of all the apps in the AA, they if it significantly less than 2% in any tracts, they would be underrepresented. In some cases like BC mentioned there is a plausible explanation, distance from branches, have to pass by 25 other lenders before they get to you, etc.

Look at composition of the tracts. Investment property multi-family and rental homes are going to be underwritten and marketed differently (you would not be dealing with the people living there. Identify your competition. Quicken, Rocket, BoA, Wells can flood an area with expensive air time, you don't have that luxary.
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#2250168 - 03/05/21 10:19 PM Re: High Minority Census Tracts Mel in WA
Brightside3277 Offline
Member
Joined: Aug 2012
Posts: 85
Oklahoma
We are a Federal Reserve Bank. I know our examiners analyze our Fair Lending performance by our number of apps/loans in black and Hispanic majority minority census tracts, but I cannot find this outlined in their examination procedures. I want to explain this to my CRA Committee, but I am having trouble finding resources to point to.
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#2250174 - 03/06/21 06:15 PM Re: High Minority Census Tracts Mel in WA
Rocky P Online
Power Poster
Joined: Jun 2003
Posts: 7,425
Florida
Interagency exam manual

Indicators of potential discriminatory Redlining such as:
R1. *Significant differences, as revealed in HMDA data, in the number of applications received, withdrawn, approved not accepted, and closed for incompleteness or loans originated in those areas in the institution's market that have relatively high concentrations of minority group residents compared with areas with relatively low concentrations of minority residents.

FRB considers Blacks and Hispanics disadvantaged.
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