MEMPHIS—For two decades, Tyrone Banks was one of many African-Americans who saw his economic prospects brightening in this Mississippi River city.

A single father, he worked for FedEx and as a custodian, built a handsome brick home, had a retirement account and put his eldest daughter through college.

Then the Great Recession rolled in like a fog bank. He refinanced his mortgage at a rate that adjusted sharply upward, and afterward he lost one of his jobs. Now Banks faces bankruptcy and foreclosure.

“;I'm going to tell you the deal, plain-spoken: I'm a black man from the projects and I clean toilets and mop up for a living,”; said Banks, a trim man who looks at least a decade younger than his 50 years. “;I'm proud of what I've accomplished. But my whole life is backfiring.”;

Not so long ago, Memphis, a city where a majority of the residents are black, was a symbol of a South where racial history no longer tightly constrained the choices of a rising black working and middle class. Now this city epitomizes something more grim: How rising unemployment and growing foreclosures in the recession have combined to destroy black wealth and income and erase two decades of slow progress.

The median income of black homeowners in Memphis rose steadily until five or six years ago. Now it has receded to a level below that of 1990—and roughly half that of white Memphis homeowners, according to an analysis conducted by Queens College Sociology Department for e New York Times.

Black middle-class neighborhoods are hollowed out, with prices plummeting and homes standing vacant in places like Orange Mound, White Haven and Cordova. As job losses mount—black unemployment here, mirroring national trends, has risen to 16.9 percent from 9 percent two years ago; it stands at 5.3 percent for whites—many blacks speak of draining savings and retirement accounts in an attempt to hold onto their homes. The overall local foreclosure rate is roughly twice the national average.

The repercussions will be long-lasting, in Memphis and nationwide. The most acute economic divide in America remains the steadily widening gap between the wealth of black and white families, according to a recent study by the Institute on Assets and Social Policy at Brandeis University. For every dollar of wealth owned by a white family, a black or Latino family owns just sixteen cents, according to a recent Federal Reserve study.

The Economic Policy Institute's forthcoming “;The State of Working America”; analyzed the recession-driven drop in wealth. As of December 2009, median white wealth dipped 34 percent to $94,600; median black wealth dropped 77 percent, to $2,100. So the chasm widens, and Memphis is left to deal with the consequences.

“;This cancer is metastasizing into an economic crisis for the city,”; said Mayor A. C. Wharton Jr. “;It's done more to set us back than anything since the beginning of the civil rights movement.”;

The mayor and former bank loan officers point a finger of blame at large, national banks—in particular, Wells Fargo. During the last decade, they say, these banks singled out blacks in Memphis to sell them toxic, high-cost mortgages and consumer loans.

The city of Memphis and Shelby County sued Wells Fargo late last year, asserting that the bank's foreclosure rate in predominantly black neighborhoods was nearly seven times that of the foreclosure rate in predominantly white neighborhoods. Other banks, including Citibank and Countrywide, foreclosed in more equal measure.

In a recent regulatory filing, Wells Fargo hinted that its legal troubles could multiply. “;Certain government entities are conducting investigations into the mortgage lending practices of various Wells Fargo affiliated entities, including whether borrowers were steered to more costly mortgage products,”; the bank stated.

Wells Fargo officials are not backing down in the face of the legal attacks. They say the bank made more prime loans and has foreclosed on fewer homes than most banks, and that the worst offenders—those banks that handed out bushels of no-money-down, negative-amortization loans—have gone out of business.

Not every recessionary ill can be heaped upon banks. Some black homeowners contracted the buy-a-big-home fever that infected many Americans and took out ill-advised loans. And unemployment has pitched even homeowners who hold conventional mortgages into foreclosure.

The reversal of economic fortune in Memphis is particularly grievous for a black professional class that has taken root here, a group that includes Wharton, a lawyer who became mayor in 2009. Demographers forecast that Memphis will soon become the nation's first majority black metropolitan region.

That prospect, noted William Mitchell, a black real estate agent, once augured for a fine future.

“;Our home values were up, income up,”; he said. He pauses, his frustration palpable. “;What we see today, it's a new world. And not a good one.”;

For the greater part of the last century, racial discrimination crippled black efforts to buy homes and accumulate wealth. During the post-World War II boom years, banks and real estate agents steered blacks to segregated neighborhoods, where home appreciation lagged far behind that of white neighborhoods.

Blacks only recently began to close the home ownership gap with whites, and thus accumulate wealth—progress that now is being erased. In practical terms, this means black families have less money to pay for college tuition, invest in businesses or sustain them through hard times.

The African-American renaissance in Memphis was halting. Residential housing patterns remain deeply segregated. While big employers—FedEx and AutoZone—have headquarters here, wage growth is not robust. African-American employment is often serial rather than continuous, and many people lack retirement and health plans. But the recession presents a crisis of a different magnitude.

Several state and city regulators have placed Wells Fargo Bank in their cross hairs, and their lawsuits include similar accusations. In Illinois, the state attorney general has accused the bank of marketing high-cost loans to blacks and Latinos while selling lower-cost loans to white borrowers. John P. Relman, the Washington, D.C., lawyer handling the Memphis case, has sued Wells Fargo on behalf of the city of Baltimore, asserting that the bank systematically exploited black borrowers.

A federal judge in Baltimore dismissed that lawsuit, saying it had made overly broad claims about the damage done by Wells Fargo. City lawyers have refiled papers.

Former employees say Wells Fargo loan officers marketed the most expensive loans to black applicants, even when they should have qualified for prime loans. This practice is known as reverse redlining.

For a $150,000 mortgage, a difference of three percentage points—the typical spread between a conventional and subprime loan—tacks on $90,000 in interest payments over its 30-year life.

Wells Fargo officials say they rejected the worst subprime products, and they portray their former employees as disgruntled rogues who subverted bank policies.

Bank officials attribute the surge in black foreclosures in Memphis to the recession. They note that the average credit score in black Census tracts is 108 points lower than in white tracts.

“;People who have less are more vulnerable during downturns,”; noted Andrew L. Sandler of Buckley Sandler, a law firm representing Wells Fargo.

Relman, the lawyer representing Memphis, is unconvinced. “;If a bad economy and poor credit explains it, you'd expect to see other banks with the same ratio of foreclosures in the black community,”; he said. “;But you don't. Wells is the outlier.”;

Whatever the responsibility, individual or corporate, the detritus is plain to see.