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The Color of Money

Follow-ups and reaction

U.S. 'looking into' banks' practices

By Bill Dedman, The Atlanta Journal-Constitution

Published May 11, 1988, Page A13

Copyright 1988, The Atlanta Journal-Constitution

The U.S. Justice Department is "looking into" allegations of discriminatory lending practices by metro Atlanta banks and savings and loans, federal officials said Tuesday.

A Justice spokesman in Washington and U.S. Attorney Robert Barr in Atlanta said preliminary inquiries have begun in response to a series of articles in The Atlanta Journal-Constitution. The articles last week described how whites receive five times as many home loans as blacks of the same income from Atlanta's banks and savings and loans. Several lenders have closed branches or reduced hours in black or integrated neighborhoods, do not solicit real estate agents in black neighborhoods, or have policies against making smaller home loans (less than $40,000) that are often sought in working-class areas.

Courts have found similar practices in other cities to be violations of the federal Fair Housing Act and the Equal Credit Opportunity Act, which forbids discrimination in lending based on race or color. Courts have said discriminatory effect, not just discriminatory intent, is enough to prove a violation.

"We're in the process of reviewing the materials to see if there is a suggestion of a possible violation of law," said Justice spokesman Brad Marman. "We're in the very early stages. The Civil Rights Division is concerned about such allegations, and an attorney is looking into it."

Barr, U.S. attorney for the Northern District of Georgia, said, "The matter certainly has caught our attention and is being reviewed by this office. I'm frankly surprised we haven't gotten any requests from the public or any organizations. We are looking into it. It is simply a matter of reviewing the allegations to determine if there is a civil rights case here that warrants our formal attention."

Public calls for a federal investigation have come from the Atlanta chapter of the NAACP and the local and national chapters of the Association of Communities Organized for Reform Now (ACORN).

Any formal investigation would be handled by the Housing and Civil Enforcement Section of the Civil Rights Division of the Justice Department. Marman said an attorney in that office in Washington has obtained copies of the Journal-Constitution articles.

Also Tuesday, the DeKalb County Commission agreed to meet with banks and savings and loan associations either headquartered in DeKalb or with which the county does business. The meeting was suggested by Commissioner John Evans. No meeting date has been set.

DeKalb Chief Executive Officer Manuel Maloof said "it is very obvious" banks need to take a hard look at any lending practice that avoids areas on the basis of race.

"Facts show that there has been quite a discriminating factor in the areas that have been pointed out in (the Journal-Constitution), and we need to get some of these things on the table," Maloof said.

"I do believe that there are some great areas in DeKalb County that are black that do sustain the mortgages that are put in there and that the banks are missing a good bet," Maloof said.

Staff writer Anne Cowles contributed to this article.


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