The implosion of the subprime lending market has left a scar on the finances of black Americans — one that not only has wiped out a generation of economic progress but could leave them at a financial disadvantage for decades

For blacks, the picture since the recession has been particularly grim. They disproportionately held sub-prime mortgages during the housing boom and are facing foreclosure in outsize numbers. That is raising fears among consumer advocates, academics and federal regulators that the credit scores of black Americans have been systematically damaged, haunting their financial futures. Studies have shown a persistent gap between the credit scores of white and black Americans, and many worry that it is only getting wider. The Federal Reserve is collecting data on how the recession has affected credit scores by race, in what is expected to be significant research on the issue. But the widespread belief among economists, consumer advocates and community leaders is that black Americans are falling behind. Even near the height of the country’s economic boom, blacks had lower credit scores than whites. Data collected by the Federal Reserve from 2003 showed that less than a quarter of blacks had prime credit scores. Meanwhile, about 65% of whites were in this top tier. The gap got wider as black and white Americans grew older, the Fed found. By age 75, the average black consumer’s credit score still had not reached the national average. Banks and industry groups often cited low credit scores as one of the main reasons black consumers were denied loans at higher rates than whites. According to the 2000 Census, less than half of black households owned their homes, compared with nearly three-quarters of whites. A Pew Research Center analysis found that the wealth of blacks plunged 53% during the recession, driven by falling home prices. The average net worth of a black household in 2009 was $5,677, according to the study, the lowest of any racial group. After years of record prosperity, home ownership rates among black Americans have plunged to the lowest level in 16 years. Unemployment has reached levels not seen since the 1980s. Research by VantageScore found that the two biggest contributors to consumers’ deteriorating credit were the fall of home prices and unemployment. Activists say the demographic that has borne the brunt of those head winds are black Americans. Groups such as the NAACP and the National Urban League say that the black middle class is shrinking as a result.