For more than 60 years, Thomsen Reuters and the University of Michigan have tracked consumer trends and opinions.  In their most recent survey, released recently, consumer confidence rose to its highest level in three years.  For the first time in more than six years according to the survey, “consumers reported hearing more positive than negative economic developments.” 

Also, a new report from the Federal Deposit Insurance Corporation (FDIC) examined bank profits.  In the last quarter of 2010, lending institutions covered by this federal regulatory agency netted $21.7 billion.  Moreover, 62 percent of these institutions reported growth in their quarterly net income from a year ago.  Compared to their $1.8 billion net loss in the fourth quarter of 2009, it is clear that banks are in a recovery mode.

Unfortunately, the same cannot be said for many consumers and homeowners with mortgages. For example, while consumer confidence is climbing, it isn’t rising equally across all households.  The Reuters/University of Michigan study found that confidence in the economy rose by nearly 10 percent among consumer households with earnings of $75,000 or more.  But, among lower income households, confidence fell by 1.4 percent. This difference in perspective was attributed by the survey to more favorable job and income prospects among upper income households.

Another example: a new report from the Mortgage Bankers Association shows that the number of homeowners currently in some stage of the foreclosure process increased during the third quarter of 2010.  As a result, more than five million homeowners with mortgages that are 60 days or more delinquent remain at risk of foreclosure.

The financial troubles fall more heavily on communities of color too.  For example, a 2010 CRL research report, found for every 100 African-American homeowners, 11 have either lost their homes or at imminent risk of foreclosure.  For Latino families, the figures are even worse – 17 of every 100 Latino homeowners are affected by foreclosures.  These widespread foreclosures have drained an estimated $350 billion from communities of color.  Additionally, alternative financial services such as auto title and payday loan stores are heavily concentrated in these same communities of color.  And, in these highly-visible neighborhoods, the people who frequent them become poorer from the high fees assessed.

In 2011 and beyond if these troublesome trends continue, they will worsen the racial wealth gaps that are already too broad.  The Institute on Assets and Social Policy (IASP), part of Brandeis University’s Heller School for Social Policy and Management, reported last year that the wealth gap between Whites and Blacks was now $95,000, compared to $20,000 in 1984. 

It seems that while some economic recovery has been accomplished, there is more – much more – to be accomplished.
Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She can be reached at