Julia Seward, community reinvestment officer for the Signet Banking Corp., represented the Consumer Bankers Association in testifying on how to guard against discrimination in mortgage lending before joint hearings by the Consumer Affairs and Coinage Subcommittee and the Banking, Housing and Community Development Sub-committee of the House Banking, and Urban Affairs Committee. Following are excerpts from her testimony in which she describes specific programs adopted by lenders to increase service to minorities. Additional excerpts will be carried in the June 1 issue.
CBA members have learned a great deal from their self-assessment process and community outreach. It is, of course, a long-term effort-begun before the release of the 1990 HMDA data and nowhere near completion. Nevertheless, whether they began before the recent release of the HMDA information, or were prompted by the information, CBA members have adopted new and in some cases creative policies to address the problem. Among other things, these have involved (1) taking affirmative steps to ensure consistent lending policies and actively seeking to approve loan applications from minorities and low- and moderate-income applicants, consistent with safe and sound banking practices; (2) providing education and counseling services that teach prospective home buyers about the process of establishing credit history, resolving credit problems, and applying for a mortgage loan; (3) providing or supporting home buying programs that offer easier access to first-time home buyers and others, often predicated on the successful completion of counseling programs; and (4) creating or participating in community development corporations, public/private partnerships, and multibank and consortia of banks that have provided millions of dollars in loans to low- and moderate-income communities.