Following the bursting of the subprime bubble, local housing lending to African-Americans fell by nearly half from 2007 to 2009.

Yet, local lending to whites increased 22 percent during that same period, according to a report by the Equal Housing Opportunity Council.

The council, which is a nonprofit organization advocating fair housing practices, also found that blacks applying for mortgages, refinancing or home improvement loans were disproportionately denied loans compared to white applicants.

The council's leaders say the report's findings highlight the need for banks to increase financial products and services to better reach minority and low-income communities.

"It is a call for financial institutions to work together with community organizations and local governments to ensure that people in all neighborhoods and communities have equal access to credit," said EHOC's Assistant Director Mira Tanna.

The report, "Redlined: A Fair Lending Analysis of the St. Louis Metropolitan Area," analyzed loan data from mortgage lenders in the St. Louis area over a three-year period. Data for 2010 was not yet available.

The report, which is available at, has some limitations. For example, the study doesn't examine local figures before 2007, when subprime lending was dangerously loose. It also doesn't factor in loan applicants' income in the analysis of loan denials by race.

Greg Squires, professor of sociology at George Washington University in Washington, whose research is focused on lending and fair housing issues, said including additional credit history and income information for loan applicants would have provided a clearer picture of lending patterns.

Even so, he said, the report's findings reveal alarming disparities.

"This is consistent with what's happening nationwide, where lending is up in high-income areas and down in low-income and minority communities," Squires said. "It provides additional evidence of why we need vigorous enforcement of fair housing laws."

From 2007 to 2009, the number of loans to white borrowers rose to 101,256, a 22 percent increase. Loans to African-Americans declined to 5,612, a 49 percent drop, the report found.

The trend was more pronounced by geography. In areas with a more than 80 percent minority population, lending dropped 68 percent, while lending in areas with a less than 10 percent minority population increased 24 percent.

The report also found disparities in loan denials. More than 30 percent of African-Americans who applied for loans were denied, compared to a denial rate of 13 percent of white applicants. Hispanic applicants had a denial rate of 21 percent.

The analysis also examined the 2009 data of the 10 largest area mortgage lenders, who accounted for 40 percent of housing loans made locally.

Among the top ten, USA Mortgage (35 percent), Pulaski Bank (35 percent) and Bank of America (30 percent) had the highest percentage of loans to individuals with low- and moderate income, which is less than $54,300.

The report found that Wells Fargo Bank, the second-largest mortgage lender locally, had the lowest figure, with only 17 percent going to these borrowers. This is at odds with the bank's status as the leading originator of loans to low- and moderate income borrowers nationally.

"While we're one of the largest lenders in St. Louis, we haven't been as successful in attracting market share among those groups as we were on the national level," said bank spokesman Tom Goyda. "We are committed to doing a better job in serving minority and low- and moderate-income borrowers in St. Louis."

Birmingham, Ala.-based Regions Bank, which has 78 local branches, had the highest denial rate disparity between African-American and white borrowers. More than 28 percent of African-Americans were denied loans in 2009, compared to a denial rate of 6.17 percent for white applicants, 9.23 percent of Asian applicants, and 11.11 percent of Hispanic applicants.

As a result, Regions' black applicants were 4.6 times more likely to be denied than a white applicant. The average rate was 2.4 times for the entire St. Louis area.

A Regions Bank spokesman declined to answer specific questions about the report, but said the bank scored a satisfactory rating on its most recent Community Reinvestment Act evaluation.

The CRA, passed by Congress in 1977, prohibits red-lining, or discriminatory practices against low-income areas. Banks are reviewed for CRA compliance every two years.

"We have a long standing commitment to lending to all parts of this community and to doing the right thing," Regions Bank spokesman Mel Campbell said in a statement.