Testimony for Joint Legislative Hearing on COVID-19’s Impact on Minority Communities

Kirsten Keefe, Ruhi Maker, Barb Van Kerkhove May 28, 2020



This testimony focuses on the impact of COVID-19 on lending in minority businesses communities using the Rochester metropolitan area as an example, and on the impact on minority homeowners struggling to cope with foreclosure.

For all of New York’s small businesses to succeed, no matter their size, sector or geographic area, they need access to affordable, responsible credit and lenders who understand their local market. In the Rochester metropolitan area, prior to the pandemic, lending to micro or small businesses owned by people of color and in communities of color appeared to have been improving. However, the COVID-19 pandemic has disproportionately affected businesses in these communities and is likely to change the trajectory of lending in the foreseeable future. Further, measures designed to help small businesses such as the Paycheck Protection Program had serious structural limitations, including its fee structure and heavy reliance on prior bank relationships, resulting in businesses of color being left behind more often than white-owned businesses. We conclude the section with a number of recommendations including the need to address structural problems in the Paycheck Protection Program; to have set asides for Minority/Women-owned Business Enterprises (MWBEs); and the need to continuously grow the NY Forward Fund.

In the area of homeownership, foreclosures disproportionately impact communities of color. In the year between November 2018 and October 2019, 43% of homeowners served statewide by the Homeowner Protection Program (HOPP) grantees were homeowners of color. For New York City alone, 75% of the households served were minority homeowners. Before the pandemic struck, while still high, the delinquency and foreclosure numbers were declining in most regions of New York State.

Just when we thought we were starting to get a hold of the foreclosure crisis in New York State, the problem has erupted anew, and we fear the numbers will be staggeringly greater than even in the years following the recession of 2007-2008. We must resolve to treat mortgage lending and foreclosures as civil rights issues by ensuring the comeback after the pandemic is not disproportionately shouldered by people in minority communities.


Read full testimony here: Testimony for Joint Legislative Hearing on COVID-19’s Impact on Minority Communities