DOES ANYBODY WHO WORKS HERE LOOK LIKE ME - MORTGAGE LENDING, RACE, AND LENDER EMPLOYMENT

Objective. Debates over racial discrimination in mortgage lending have been contentious for decades. The objective of this paper is to exami ne the relationship between the racial composition of the workforce of financial institutions and the likelihood of approval of loans to bla ck applicants. Methods. A binary legit analysis is performed on a data set on black and white mortgage applicants in the Milwaukee metropoli tan area. The data set is based on HMDA data, EEO-1 data, and 1990 U.S . Census data. Results. This study finds that the likelihood of a blac k applicant being approved increases as the proportion of black employ ees increases when several applicant and institutional characteristics that influence loan review process are controlled. The effect of blac k professionals at thrift institutions is particularly significant. Co nclusions, The results suggest that regulatory agencies could incorpor ate affirmative action and related issues in their enforcement activit ies and lenders could benefit from more aggressive voluntary affirmati ve action efforts.