Academic Seminar Series, The Shifting Landscape of DEI and Racial Discrimination in Mortgage Lending, Tracy Yue Wang, May 8th, 2025
Department of Banking and Financial Management University of Piraeus
Academic Seminar Series
Thursday, May 8th, 2025 / Time: 16:15 – 17:30, Online
The Shifting Landscape of DEI and Racial Discrimination in Mortgage Lending
Tracy Yue Wang
Carlson School of Management, University of Minessota
Abstract
This paper examines the impact of pro-DEI and anti-DEI movements in U.S. society on racial discrimination in mortgage lending. We use the Black-White racial mortgage rate gap in Government Sponsored Enterprises (GSE) guaranteed mortgage loans to capture racial discrimination. We document an immediate, significant and persistent decline in racial discrimination following the murder of George Floyd (GF) in May 2020. The reduction is more pronounced in counties and among lenders that likely adopted a more pro-DEI stance post-GF. Additionally, competition with pro-DEI lenders contributes to a broad and enduring impact on other lenders. Our results cannot be attributed to changes post-GF in Black borrowers’ credit worthiness, overall lending standards, regulatory enforcement, or the economic impact of the COVID-19 pandemic. After 2022, public sentiment towards DEI weakens, and state-level anti-DEI legislation emerges. However, the reduction of discrimination achieved during the pro-DEI period remains intact, even in states that enacted anti-DEI bills. In these states, counties with greater competitive pressure from pro-DEI lenders experience further reductions in the racial rate gap amidst the anti-DEI sentiment. Overall, our study suggests that despite large swings in public sentiment and legislative environments regarding DEI, the impact of significant social awakening to racial justice and equality, reinforced by lending market competition, can effectively mitigate racial discrimination in mortgage lending.
Tracy Wang is the John Spooner Professor of Finance at Carlson School of Management of University of Minessota. Her expertise lies in the fields of corporate governance, law and economics, and behavioral finance. Her current research explores the impact of prominent societal trends such as increasing attention to ESG and DEI, increasing polarization in ideology, and increasing income inequality on corporate finance and corporate governance. She has also established expertise in research related to corporate securities fraud, securities market regulation, and the value impact of management. She has published in top economics, finance, and accounting journals such as Journal of Finance, Review of Financial Studies, Review of Economic Studies, Journal of Law, Economics, and Organization, Journal of Accounting and Economics. She currently serves as an editor for Journal of Corporate Finance
This seminar will be online on Teams. Click here to attend