One of the things that has disturbed me the most about the subprime crisis is the impact it's had on the African American and Hispanic communities, and the way banks had targeted these people for predatory and toxic loans. As Melvin Oliver and Thomas Shapiro wrote in The American Prospect toward the end of last year, home equity accounts for 63% of total average net worth of black households versus only 38.5% of average white net worth and predatory loans were targeted at black and minority groups. Despite the Fair Housing Act of 1968, housing in the US still comes down to class and race. Real estate agents have a code for it: location, location, location.

So no surprises that the chickens are coming home to roost with reports of Well Fargo being targeted in a federal lawsuit alleging it steered blacks into subprime mortgages. The New York Times reports that Well Fargo employees employees referred to blacks as "mud people" and to subprime lending as "ghetto loans". Furthermore, there are claims that the bank targeted black churches because they had so much influence. A New York Times analysis reveals that black households making more than $68,000 a year were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or even lower incomes. For Wells Fargo borrowers, only 2% of whites in that income group hold subprime loans versus 16.1% of blacks.

American might have elected a black president but the country has a long way to go to sort out its racial issues. The subprime crisis is a mirror that reflects the deep-seated problem of race.