The result is that whites’ wealth advantage—and blacks’ disadvantage—gets passed down from generation to generation. Which means that forms of racial discrimination “that happened in the past like redlining continue to show up in bank accounts today,” says Traub.
Discrimination isn’t just a problem of the past, Traub says. She points to another study she co-wrote on racial steering in mortgages. In 2012, for example, Wells Fargo & Co. paid at least $175 million to settle allegations that it steered thousands of black and Latino borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. Prosecutors called the steering a “racial surtax.” Wells Fargo admitted no wrongdoing.
This article was provided by Bloomberg News.