Someone ought to ask President Clinton to throw Bruce C. Vladeck's name into the ring for the chairmanship of the Federal Deposit Insurance Corp.
If the name doesn't ring a bell, that's because Mr. Vladeck, 43, is a health care professional, not a banker.
Since May, he has been running the Health Care Financing Administration, the agency responsible for Medicare and Medicaid. Before that, he was president of the United Hospital Fund, a charity based in New York City.
How does that qualify him as a bank regulator?
Since 1986, HCFA has produced a colossal annual report (55 volumes last year) on hospital mortality rates that is the medical industry's equivalent of the Home Mortgage Disclosure Act, in that it is grossly misleading. Mr. Vladek, 43, thought that was grounds enough to delay its release, so he sat on it.
"I'd rather give out no data than crummy data," he told a reporter from the Associated Press. "It's overly simplistic. People perceive it as telling you more than it does. I think it doesn't adequately adjust for some of the problems faced by inner-city hospitals."
The report (a voluntary undertaking as opposed to a statutory requirement) implies that public hospitals serving the predominantly black populations of our inner cities are grossly inferior to hospitals in other neighborhoods because the inner-city hospitals have a higher-than-predicted death rate among the elderly.
What the data fail to note is that the elderly inner-city patients are often older or sicker than the national average.
He couldn't get away with sitting on mortgage disclosure data if he were a bank regulator, because there's a federal law that says the Fed has to release it to the public, no matter how flawed it might be.
Still, it would be refreshing to hear a top regulatory say forcibly in public what many of them whisper in private: that using HMDA's distorted data to finger a bank for racial discrimination, while perhaps politically correct, is outrageously unjust.
Largely Unnoticed
Mortgage disclosure data, like the hospital data, is too thin a measure of discrimination. It's also too thin to demonstrate any positive effects of bank efforts to reach out to minorities, such as second review programs and counseling.
Conclusions drawn from the numbers tend to caricature the industry, exaggerating its vices and understanding its virtues, making it perfect prey for demagogues.
In fact, regulators would have to ask banks for an additional 30 to 40 items of information about each mortgage applicant before the disclosure could be considered an accurate indicator of lending bias. (But the cost to the banks of providing the added data would be preposterous).
Mr. Vladeck's rebellious action engendered no hysterical reaction. His stand on behalf of fairness and accuracy warranted about eight column inches inside The Washington Post. As as far as I know, not a single congressman made a federal case out it by accusing him of a coverup.
Bankers Could Benefit
Bankers, like the administrators of those inner-city hospitals, could benefit statement about the forceful, public statement about the pluses and minuses of the mortgage disclosure data by a regulator of stature at the time of its release.
A speech in favor of fairness and accuracy might curb the impulse of some editors to write hysterical headlines and the urge of some congressmen to seize upon the issue more for self aggrandizement than concern about the well-being of the republic. Bankers might even get a fair hearing.
