Go to the next article or back to the Color of Money index or Power Reporting


The Color of Money

Follow-ups and reaction

1st American changes service on Southside

By Bill Dedman, The Atlanta Journal-Constitution

Published July 12, 1988, Page B3

Copyright 1988, The Atlanta Journal-Constitution

First American Bank has made several changes to increase its service to black neighborhoods. The bank did not acknowledge any racial discrimination, but said it had not served black neighborhoods adequately.

First American, formerly the National Bank of Georgia (NBG), announced Monday it would:

-- Make $2 million in home improvement loans at low interest rates and more favorable terms than usual in certain working-class neighborhoods, mostly in predominantly black south Atlanta.

-- Contact black real estate agents.

-- Hire qualified black real estate appraisers.

-- Advertise in black media.

The changes address some of the issues raised in a series of articles May 1-4 in The Atlanta Journal-Constitution. The newspapers reported that the city's banks and savings and loans made few home loans in black neighborhoods of any income, had closed branches in black areas, kept branches in black areas open fewer hours than branches in white areas, rarely called on minority real estate brokers and enforced minimum loan amounts that rule out many minority and low-income homebuyers and small businesses.

First American was at the bottom of one of the newspaper's rankings, having a 38-to-1 ratio of home loans in white and black middle-income neighborhoods from 1984-1986. The bank has since quit making home purchase loans, which is why the program focuses on home improvement loans, bank Vice President Richard Guthman said.

Guthman said the bank was not admitting any discrimination.

"It's not a racial kind of thing. It's strictly how an institution views its credit. Our bottom line is to have a bottom line," Guthman said.

The changes are less extensive than those announced by the four largest Atlanta banks, Citizens & Southern, Trust Company and First Atlanta. The first three have set up $45 million in special loan programs, in addition to the consortium, and have expanded hours and application centers for home loans. The fifth largest bank, First Union, has said it will have an announcement soon.

First American's home improvement loans of $1,500 to $25,000 will be available to homeowners in targeted areas with household incomes below $35,000. The rates are now 9.5 percent up to $5,000, and 10 percent for higher amounts.


Go to the next article or back to the Color of Money index or Power Reporting


Reprinted with permission from The Atlanta Journal and The Atlanta Constitution. Further reproduction, retransmission or distribution of these materials without the prior written consent of The Atlanta Journal and The Atlanta Constitution, and any copyright holder identified in the material's copyright notice, is prohibited.


Please send comments and story ideas to Bill Dedman, Bill@PowerReporting.com

Home page: Power Reporting