It sure is true! I know this first hand. There was open racism with Mormons and non-mormons when I grew up. I used to laugh it off and think the mormon kids were all brats. We would have Mormons (white folk) versus the Catholics (mostly Mexicans and anyone who was Christian) games(softball, kickball, etc.). I guess it was better than what my Dad had to put up with - which was total segregation from them. In our local historical museum they now call it white and non-white segregation but we knew it was mormon and non-mormon segregation.
Did you grow up in Utah?