WASHINGTON -- A panel of advisers to the Federal Reserve Board has urged bankers and regulators to quit arguing about whether loan bias exists, and get on with the job of eliminating it.
In a resolution adopted last Thursday, the Fed's Consumer Advisory Council said there is ample evidence that mortgage discrimination has excluded minorities from homeownership.
"We must move beyond a debate over the existence of discrimination to a discussion of how best to detect and remedy it," said the 30-member council, which includes consumer advocates, lenders, and business executives.
The decision was a break-through for the council, which has been bogged down for several years in a debate over the causes and extent of mortgage discrimination.
Some observers said the group, which meets three times a year with Federal Reserve Board members, was behind the curve.
"If the premise is that all we're doing is having a debate, that's a false premise," said a Fed official, speaking on background.
"To the extent discrimination exists, we're trying to identify and eradicate it," he added.
Others, however, said the Consumer Advisory Council was making progress.
"I think there was a denial stage," said Fritz Elmendorf, spokesman for the Consumer Bankers Association. "Now we're on to coping."
The issue of loan bias grabbed headlines last fall, when the Fed released Home Mortgage Disclosure Act data showing high rejection rates for blacks and Hispanics.
But bankers and regulators maintain that the data alone don't prove that minority loan applicants are treated unfairly. Credit histories and debt levels could account for the disparities, they say.
"This resolution allows us to leave the blame issue behind," said council member Gary Hatten, vice president for community development at Bankers Trust Co., New York.