Agency to Step Up Vigilance on Loan Discrimination
The agency regulating the nation's largest banks announced last week that it was taking steps to better detect mortgage lending discrimination.</br></br>Stephen R. Steinbrink, acting Comptroller of the Currency, said that by the end of this month a memo would be sent to all examiners of nationally chartered banks ordering the use of more sophisticated detection techniques.</br></br>"It may not have been conscious. It may not have been intentional. But whether it was intentional or not, it is illegal," Steinbrink said in a speech to fellow regulators.</br></br>In the past, examiners generally looked at rejected mortgage loan applications from blacks and other minorities. If they found a reason for the rejection - such as a flawed credit history - the examiners would conclude no discrimination existed.</br></br>However, most borrowers have some flaw in their credit history or financial condition and lenders exercise considerable judgment in deciding whether to make a loan.