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The Color of Money

Editorials and letters

Redliners should do business fairly, or not at all

The Atlanta Journal

Published May 6, 1988, Editorial Page, Page A20

Copyright 1988, The Atlanta Journal-Constitution

Let's tip our hats to Marvin Arrington: With half the town ripe for revolt after reading our redlining series, the cool, dapper City Council president pulls the principals together -- bankers, city leaders and townsfolk -- to civilly discuss a crisis Hosea Williams equates in importance to drugs or AIDS -- redlining.

Arrington wouldn't let Wednesday's forum intended for bankers turn into a circus. When activists raised a poster decrying redlining, Arrington demanded that it come down. When rabble rousers shouted their pet peeves, Arrington told them he wanted to hear from bankers. When bankers sat mum -- shocked by the blow delivered in these newspapers -- Arrington remained gracious. Wednesday, high up in the Peachtree Westin, Arrington did his job.

His job? To get leaders and bankers to discuss ways to stop the economic pummeling called redlining. Arrington set up an action committee, naming a banker to head it. It will recommend ways that bankers can adopt more reciprocal "trade," so to speak, with their black neighbors.

At bottom, trade is what we're talking about. Dollars flow into banks in the form of deposits; and dollars flow back to the depositors in the form of wealth-creating loans. In white communities, the flow-back is $13 for every $100 deposited. In black communities, it's just $9.

Black communities are not asking for something for nothing when they ask banks to treat them equitably; they're asking only for fair reinvestment of the $765 million they have invested in the banks. Federal law requires reinvestment -- and corporate citizenship seems to demand it.

Neither did anyone at Wednesday's meeting demand a certain number of loans -- quotas -- for blacks. No one demanded loans for unqualified loan applicants. But someone ought to demand fair reinvestment of a community's deposits. That's basic. That's fair. And that ought to be done.

Arrington appointed Henry Garmon, chairman and chief executive officer of Fulton Federal, to head the action committee. Garmon figures the committee can produce solutions if it focuses on qualified loan applicants who were rejected. But Garmon best not try to reconstruct the work of staff writer Bill Dedman. If the committee is to return with recommendations, it must focus on how banks are shortchanging black communities, not if.

Finally, if the committee fails to produce workable solutions, a tactic described by Bill Campbell might offer a last resort. "The city has the bulk of its deposits" in one bank, said the city councilman, "and it was the worst offender on the list." The implication: Banks that shortchange black communities should not receive tax deposits.

Earl Shinhoster of the NAACP was more blunt: "If lending policies and practices do not change substantially . . . economic withdrawal makes sense."

Bankers face two choices: They can "work together for the good of the city," as Arrington proposes. Or they can risk the last resort Shinhoster suggests. Their ultimate choice may be to do business equitably, or to lose business done inequitably.


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