Authors: Matteo Crosignani and Hanh Le
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Staff Reports
Stakeholders’ Aversion to Inequality and Bank Lending to Minorities
Number 1079
November 2023 Revised March 2026
November 2023 Revised March 2026
JEL classification: G21, J15, E51
We document large and persistent cross-sectional differences in banks’ propensity to lend to minorities based on bank stakeholders’ aversion to inequality. Using mortgage application data from the Home Mortgage Disclosure Act, we show that banks with more inequality-averse stakeholders are more likely to approve applications in high-minority relative to low-minority areas and, within census tracts, from non-white borrowers relative to white borrowers. These differences (i) are not driven by applicant selection or loan officer assignment, (ii) coincide with stakeholder alignment, reflected in depositor retention and disclosure of initiatives for underserved communities, and (iii) do not predict worse ex-post loan performance.
Author Disclosure Statement(s)
Matteo Crosignani
I, Matteo Crosignani, author of the NY FED Staff Report submission “Stakeholders’ Aversion to Inequality and Bank Lending to Minorities” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Hanh Le
I, Hanh Le, co-author of the NY FED Staff Report submission “Stakeholders’ Aversion to Inequality and Bank Lending to Minorities” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
I, Matteo Crosignani, author of the NY FED Staff Report submission “Stakeholders’ Aversion to Inequality and Bank Lending to Minorities” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Hanh Le
I, Hanh Le, co-author of the NY FED Staff Report submission “Stakeholders’ Aversion to Inequality and Bank Lending to Minorities” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Suggested Citation:
Crosignani, Matteo and Hanh Le. 2023. “Stakeholders’ Aversion to Inequality and Bank Lending to Minorities.” Federal Reserve Bank of New York Staff Reports, no. 1079, revised March 2026. https://doi.org/10.59576/sr.1079
Crosignani, Matteo and Hanh Le. 2023. “Stakeholders’ Aversion to Inequality and Bank Lending to Minorities.” Federal Reserve Bank of New York Staff Reports, no. 1079, revised March 2026. https://doi.org/10.59576/sr.1079
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