The 1999 North Carolina anti-predatory-lending law has caused a decline in lending to minority and low-income borrowers, according to a study released by the Mortgage Bankers Association.In addition, the MBA said the study demonstrates that the North Carolina law has had negative effects on the availability of credit for all income and racial groups. The study, conducted by Abt Associates Inc., Cambridge, Mass., looked at lending volumes before and after the law was passed on a census-tract-by-census-tract basis and compares the results with what took place in states with economies similar to North Carolina's. "The study reveals, vis-à-vis the anti-predatory lending bill, the North Carolina state legislature has imposed a modern-day form of redlining on its citizens by choking off mortgage credit to minority and low-income neighborhoods," said MBA chairman Robert M. Couch. The study analyzed the changes in lending in North Carolina and the neighboring states of Tennessee and South Carolina before and after passage of the North Carolina law. Among the study's major findings is that overall lending in predominantly minority neighborhoods declined 1.2% in North Carolina after passage of the law, compared with a 5.2% increase in the comparison states. Loans by subprime lenders declined 8.1% and loans by prime lenders increased 0.7%, the study said.

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