Almost a year after The Atlanta Journal-Constitution revealed a pervasive pattern of racial discrimination in mortgage lending, the U.S. Justice Department has undertaken an investigation of the practice in Atlanta. It is a commendable start; but it is just that, a start.
Given the data made available in the newspaper series, the Justice Department probe appears to be too narrow in its focus and may even be misplaced.
It seems obvious that the government's attention centered on Atlanta's banks and savings and loan institutions simply because the newspaper series originated in this city. That's understandable; but if government lawyers had read the series carefully and followed ensuing actions in this city they might have found a more effective application of their limited resources.
They would have discovered two significant factors that should have influenced their thinking.
First, as the newspaper series made clear, Atlanta's lenders are by no means the worst offenders in the practice of discrimination in mortgage lending. The rejection rate among blacks seeking mortgage loans is considerably higher in many other cities of comparable size.
In Atlanta, the series noted, 23.3 percent of blacks seeking loans are turned down while only 10.6 percent of whites are rejected, a ratio of 2.20-1. In Milwaukee, 24.3 percent of blacks and 6.2 percent of whites are turned down, a ratio of 3.90-1. Pittsburgh, Cleveland, Chicago and Detroit have rejection ratios exceeding 3.50-1.
That does not, in any sense, make the practice of redlining forgivable in Atlanta. It does, however, suggest that the Justice Department might more profitably turn some of its attention to those cities where the problem is even worse than it is here.
A second factor to be considered is this: The same newspaper series that prompted the Justice Department investigation generated considerable pressure against Atlanta's lending institutions; and that pressure has been effective.
Responding to the anger of the city's black political leadership, Atlanta's l argest banks created a $77 million pool for low-interest mortgages, primarily in black neighborhoods, and made a serious effort to change policies to remedy the situation.
As Dallas Lee, a Citizens and Southern National Bank spokesman, said, "The banks in Atlanta have taken so many significant steps during the last year in terms of mortgage lending, I would think the banks would be far ahead of the rest of the country in terms of minority mortgage lending."
Common sense suggests he is right.
That is not to say that a Justice Department investigation cannot serve a good purpose; the added pressure certainly will encourage a continued effort to eliminate any vestiges of redlining here. And that's worthwhile. But the Justice Department has available the same data used by The Journal-Constitution, data that shows conclusively that lending discrimination is a national problem, not just an Atlanta one.
If it is truly serious about trying to attack that problem, it must broaden its effort and bring its heaviest pressure to bear in the areas where redlining is most pervasive.
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