COMMUNITYDEVELOPMENTBANKING-L digest 416

I think you hit a number of nails on the head in your recent post. I also
don't think overt racism is the direct reason why minorities and low
income groups are not getting their fair share of the loans made by banks
and other lending institutions. I do, however, believe very stongly that
there are systemic problems - incentives and disincentives that are more
suttle, but have the same or similar results.

On Sun, 19 May 1996 BEYTOFEN wrote COMMUNITYDEVELOPMENTBANKING-L:
>
> ...there are a myriad of problems, including cultural ones, that make
> the lending process for minorities much more difficult, despite our
> best efforts...
>
> Most loan officers are commissioned these days, so a loan is income,
> regardless of the color of the applicant...


But the amount they want to borrow makes a BIG difference!

"Forget those lousy $______ loans, I'd much rather make $_________ loans"
(fill in appropriate amounts for your local market). Anyway, those
_______ ________ (fill in the appropraite adjectives and lower income
group - and don't forget the poor white trash) can't follow instructions
(which are written at the 12th grade level), and they don't keep good
records (so I have to keep their file open longer... call them over and
over...) and I have to work harder to get their package approved (and I've
wasted thousands of hours working on loans that never got approved...
arg!).

Work twice as hard for one-third the commission? That's sure stupid!
...and the folks with more money are more interesting to talk with on top
of it!





This post transferred from the cdb-l mailing list

The statistics show very clearly that while institutional incentives
may have a role in color discrimination, individual loan officers are
also have an clear effect. Decisions are made at the loan officers
desk.

The fat file phenomenon with home mortgage lending is one
example. Applicants of color have thin files while anglos have
thicker files. Why? It is because the anglo applicant has hit the
same stumbling blocks in seeking loan approval but gotten assistance
from the loan officer to add new information to his/her file.

It is also clear from our studies of HMDA data, as well as other's
studies, that white low income applicants have a better chance of
receiving a home loan than middle income african american applicants,
for example.

alan fisher
california reinvestment committee

> Date: Sun, 19 May 1996 01:26:15 -0700 (PDT)
> Reply-to: COMMUNITYDEVELOPMENTBANKING-L@cornell.edu
> From: Gerald Rioux <rioux@oro.net>
> To: COMMUNITYDEVELOPMENTBANKING-L@cornell.edu
> Subject: Re: COMMUNITYDEVELOPMENTBANKING-L digest 416

>
> I think you hit a number of nails on the head in your recent post. I also
> don't think overt racism is the direct reason why minorities and low
> income groups are not getting their fair share of the loans made by banks
> and other lending institutions. I do, however, believe very stongly that
> there are systemic problems - incentives and disincentives that are more
> suttle, but have the same or similar results.
>
> On Sun, 19 May 1996 BEYTOFEN wrote COMMUNITYDEVELOPMENTBANKING-L:
> >
> > ...there are a myriad of problems, including cultural ones, that make
> > the lending process for minorities much more difficult, despite our
> > best efforts...
> >
> > Most loan officers are commissioned these days, so a loan is income,
> > regardless of the color of the applicant...
>
>
> But the amount they want to borrow makes a BIG difference!
>
> "Forget those lousy $______ loans, I'd much rather make $_________ loans"
> (fill in appropriate amounts for your local market). Anyway, those
> _______ ________ (fill in the appropraite adjectives and lower income
> group - and don't forget the poor white trash) can't follow instructions
> (which are written at the 12th grade level), and they don't keep good
> records (so I have to keep their file open longer... call them over and
> over...) and I have to work harder to get their package approved (and I've
> wasted thousands of hours working on loans that never got approved...
> arg!).
>
> Work twice as hard for one-third the commission? That's sure stupid!
> ...and the folks with more money are more interesting to talk with on top
> of it!
>
>
>
>
>


This post transferred from the cdb-l mailing list

Perhaps you would be willing to share the details of your statistical studies
with the group. I have seen plenty of anecdotal information, but little
projectable data.


This post transferred from the cdb-l mailing list