CHICAGO - Northern Trust Co. said the U.S. Department of Justice has launched a review of mortgage lending practices at four of the company's units.
The company said the department informed it "that it initiated the inquiry as part of its responsibility to investigate possible discrimination under the Fair Housing Act and the Equal Credit Opportunity Act."
According to a statement by chairman David W. Fox, the company "has been and will remain dedicated to fulfilling its responsibilities under the fair-lending laws, to which Northern and its people are committed."
"We expect that the strength of that commitment and the results we are achieving will become clear in the course of the department's review," Mr. Fox said.
Long Review Foreseen
He said that a "significant amount of information has been requested," and that it is "likely to take some time for it to be produced and assimilated, and for the results of this process to become clear."
Northern Trust said it has more than 30 programs targeted to ownership of affordable single-family homes, and a number of programs designed to help members of minority groups through the application process.
From 1991 to 1992, the number of loans Northern Trust made to minorities through these and other programs increased by 71%, the company said, and the number of applications increased by 67%.
Northern said it "will also show significant increases" in 1993.
The units under review are Northern Trust Co., Northern Trust Bank DuPage, Northern Trust Bank Lake Forest, and Northern Trust Bank O'Hare.
Racial Disparities
As reported earlier this month in a Wall Street Journal study of more than three million mortgage applications submitted to lenders in 1992, Northern Trust Co. had one of the largest racial disparities in mortgage lending, with a black-to-white rejection ratio of 11.4 to 1.
The bank said at the time that its loan approvals for blacks multiplied more than fivefold from 1990 to 1992, despite the high rejection rate.
