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The Color of Money

Editorials and letters

Redlining: an economic war waged on black communities

The Atlanta Journal-Constitution

Published May 1, 1988, Editorial Page, Page D2

Copyright 1988, The Atlanta Journal-Constitution

Atlanta's black neighborhoods are under attack, and under attack from some unlikely sources: the city's most reputable banks and savings and loans. Their artillery is called "redlining." And on the homes and businesses they hit, the effects are devastating.

The economic war on black communities must stop, for no other reason than because it is wrong, and that it drains economic lifeblood from communities that desperately need it.

An indepth series on redlining begins in today's Journal-Constitution and runs through Wednesday. It ought to spark discussion of ways we can cease the bombing of Atlanta's black communities.

The series is the result of analyzing $6.2 billion loaned by Atlanta's major banks and savings and loans over a six-year period. The facts were gleaned from federal banking records, which were obtained through the Freedom of Information Act. The facts are indisputable: Major banks and savings and loans make few loans and mortgages in black neighborhoods, regardless of income. Overall, banks and savings and loans lend to whites five times as often as to blacks of the same income.

The careful research of staff writer Bill Dedman, who compiled and wrote the series, isolates and explains away factors other than race that could account for banks' uneven lending patterns. Lower income could explain why banks write fewer loans to blacks, but it doesn't: When blacks and whites of similar income are paired, blacks still fare far worse in getting loans.

A bad credit standing also could account for the lending disparity, but fails to: Blacks' creditworthiness is no worse than whites'.

Creditworthiness, income, and other factors Dedman examines could account for lending disparities, but they don't. When those explanations fall to the facts, just one factor remains standing: the color of neighborhoods.

And the economic bombing persists even though blacks deposit some $765 million a year into banks, much of it into the same institutions doing the redlining. Few of those deposits are making their way back into black communities in the form of home loans. So black neighborhoods are left with fewer funds to improve and increase the value of their homes; and more homes in need of roofs, an exterior paint job, a new porch.

Redlining hits blacks not just in depressed home values and lost profits from sales. Worse is a nefarious transfer of blacks' bank deposits to "safer" loans in other communities. That hemorrhage of black deposits drains the economic lifeblood from black communities -- and transfers much of it to white neighborhoods.

A city that's truly too busy to hate will find ways to stop the economic war that's being waged on black communities. Hopefully, our series will spark discussion of ways to do so.


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