A committee formed to address discriminatory lending practices in Atlanta issued a report Thursday calling for a host of reforms, including formation of a 10-year, $500 million mortgage consortium, a pool of minority business loans and more minorities in bank management.
City Council President Marvin S. Arrington acknowledged the report of the Fair Lending Practices Action Committee includes no enforcement mechanisms, but expressed confidence that Atlanta banks will heed a moral call to change.
To help them hear the call, city officials have vowed to withdraw all city funds from lending institutions that do not "show good faith" in implementing the reforms -- a move committee members contend would be symbolic but effective.
"I don't think it will come to that; I guarantee you that they're going to respond," Mr. Arrington said, adding, "The hawk, Marvin Arrington, will be watching."
Mr. Arrington and several committee members cited the formation of the Atlanta Mortgage Consortium last May as a sign that the city's lending institutions are willing to change.
Initially, nine banks contributed $65 million to the consortium for low-interest home loans to working-class buyers on the city's Southside. The committee report calls for obtaining new commitments for $500 million over the next 10 years.
Mr. Arrington formed the 24-member committee in May in response to The Atlanta-Journal Constitution series "The Color of Money."
"Certainly there was redlining in some areas as the newspaper pointed out and those problems are already being addressed by the AMC," said state Sen. Gene Walker (D-Decatur), who co-chaired the committee.
The committee concluded that the city's lending institutions should do more to promote the overall economic development of Atlanta's poorer neighborhoods, according to the report, formally presented to Mr. Arrington Thursday.
"Although the newspaper series had concentrated primarily on the issue (of) homeownership, the action committee . . . concluded that homeownership could not be considered as a single issue," the report said.
"Other issues, including loans to small business and economic development projects are affected."
As a result, the committee broke off into six subcommittees: real estate brokers and appraisers; consumer credit and financial services; homeownership; small businesses; development; and insurance and surety.
Among the recommendations:
-- Insurers should hire and promote more minority agents.
-- The formation of an advisory committee composed of Southside citizens to monitor real estate brokers and appraisers.
-- Low cost checking services for low income groups.
-- Modify requirements to establish a checking account to accept a driver's license or Grady Hospital cards in lieu of credit cards.
-- Extension of banking hours and more branch locations.
-- Increase the use of minority media in marketing financial services.
-- Use more minority loan-closing attorneys.
-- Lines of credit should be made available to minority businesses.Go to the next article or back to the Color of Money index or Power Reporting
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