The economy may be on the upswing, but no one seems to have toldCalifornia's largest banks. As a result, the state's smallbusinesses owned by women and people of color are suffering,according to a community advocacy group.

Financial institutions in the Golden State that cut back onsmall business lending during the 2008 financial crisis have yet toloosen their purse strings in any meaningful way, according to areport issued this month by the California Reinvestment Coalition,a San Francisco-based organization that advocates with financialinstitutions on behalf of lower-income communities and communitiesof color.

Subsequent declines in business lending have meant economicgrowth as the economic recovery continues, the report said.

“Taxpayers pumped hundreds of billions of dollars into the majorbanks, but the banks have turned their backs on small businessesand Main Street,” said Alan Fisher, executive director of CRC.“Banks are continuing to hoard their money instead of making loansto small businesses, especially those owned by women and people ofcolor.”

The report showed declines in conventional small business loansas well as SBA 7a loans guaranteed by the U.S. Small Business Administration. The report noted that amongCalifornia's largest banks 7a loans declined 60% from 2007 to 2013.In addition, in 2013 only 2% of 7a loans were made to AfricanAmerican-owned business, 11% to Latino-owned businesses and 14% towomen-owned businesses.

The smaller the business, the less likely it was to receivefinancial help, with significant reductions in lending at the$150,000-or-less level, the report said.

The report also cited four of California's largest banks –JPMorgan Chase, Wells Fargo, Bank of America and Citibank – forreducing their small business lending by as much as two-thirds from2012 to 2013 in five of the state's largest metro areas. Only USBank stepped up activity, increasing its small business lending by17% in Alameda, Fresno, Los Angeles, Sacramento and San Diegocounties.

CRC has urged bank regulators to assess a bank's level of smallbusiness lending based not on peer comparisons, but on the level ofcommunity credit need as their standard in small business lendingevaluation.

The group also suggested that the Consumer Financial ProtectionBureau enforce the regulations required in the Wall Street ReformAct for transparent collection of small business data, includingrace and gender so it is transparent to the public.

“Banks must strongly support nonprofit community-based lendersand technical assistance providers so that they can build economicvitality in California communities,” the report said.