WASHINGTON -- The American Bankers Association has developed a 34-point checklist for banks to help them determine whether they may be discriminating against minorities.

The five-minute "Fair Lending Checkup" has been sent to the chief executive officers of all banks in the country as part of the trade group's fair-lending outreach.

Industry Under Pressure

The test covers a broad range. of policies and practices that could be discriminatory, including employee training, documentation procedures, advertising, and underwriting criteria.

The test comes as banks and industry associations are under pressure to prove their commitment to ending racial bias, whether intentional or inadvertent, in their mortgage lending.

Called an Ethical Issue

Despite stronger efforts in recent years, data continue to show large discrepancies in, approval rates of mortgage applications for whites and minorities.

"Fair lending is not just a compliance issue, it's also an ethical issue," ABA president William H. Brandon said in a letter accompanying the checklist.

The questions on the ABA self-test include:

* Has your bank's board of directors adopted a formal, written policy that demands equal treatment of all customers?

* Have you instituted a review of loan applications in order to ensure no disparate treatment?

* If you offer incentive compensation, does it inadvertently encourage loan officers to ignore or disregard low-income or moderate-income applicants?

In Depth Reviews Urged

A "no" or "not sure" response to any of the 34 questions in the test could highlight a potential problem, the ABA says. The trade group urges all lenders to take the test and to conduct more in-depth reviews of their minority lending.

The ABA board recently passed a resolution "reaffirming the industry's commitment to fair lending and ABA's commitment to helping banks ensure a discrimination-free lending environment," an ABA spokeswoman said.

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