Industry officials, economists, and activists disagree over why the rapid explosion in home lending to blacks came to an abrupt end last year.

Bankers and economists charge that lending to blacks ran into an unsurmountable force: rising delinquency rates on loans to lower-income minority.

But activists blame credit scoring and claim inadequate enforcement of the fair-lending and community reinvestment laws, as well as insufficient product development.

The Home Mortgage Disclosure Act data released Aug. 5 showed that home- purchase lending to blacks rose just 3.1% last year. That is the first time in five years that blacks have not experienced double-digit loan growth. Last year also was the first time since 1991 that the growth rate for loans to whites exceeded the growth rate for loans to blacks. Also, lending rose faster in high-income census tracts than in low-income ones; that hadn't happened since 1992.

Lending to blacks rose 52% in 1993, 34% in 1994, and 10% in 1995; loans to whites increased 27% in 1993 and 9% in 1994 before falling 3.1% in 1995.

"Lenders have been running into problems with their special loan programs, which were responsible for much of the large increase in lending to blacks," said one government economist. "The default rates have been quite high."

Higher default rates have prompted regulators, including Comptroller of the Currency Eugene A. Ludwig, to warn against slipping credit standards. Regulators track overall default rates, but do not single out CRA loans.

As a result, banks are tightening credit standards and becoming less willing to make loans to marginally qualified black borrowers, these officials said.

"Everyone is being more careful," one industry economist said.

One lender, who asked to remain anonymous so her bank would not be targeted for criticism, said default rates have risen "considerably" in her Community Reinvestment Act loan portfolio, although she declined to release specific numbers. That has caused the bank to tighten its underwriting standards and reduce some lending.

Allen Fishbein, general counsel to the Center for Community Change, blames the poor performance on credit scoring, which he says discriminates against minority borrowers.

"This was the first full year when credit scoring was used in a big way, and we got a decline in lending to African-Americans," he said. "We need to look at the impact of credit scoring on traditionally underserved groups."

Dan Immergluck, vice president of the Woodstock Institute, said the numbers are even worse than most people realize. "Interest rates went down significantly in 1996," he said. "We should have expected blacks to do much better just like they did in 1993."

Mr. Immergluck also said bankers have begun to realize that regulators are giving less attention to lending bias. "In 1992 and 1993 we had renewed attention to CRA, and the Boston Fed's fair-lending study had just come out," he said. "There was all kinds of attention being given to discrimination. Now we have a Congress that wants to roll back CRA, and two regulators who are fighting to keep banks under their folds."

But Alan Fisher, executive director of the California Reinvestment Coalition, blamed the banks.

"When HMDA data started being publicized, financial institutions made an effort to lend more extensively," he said. "But those efforts plateaued, and banks have stopped developing new products to expand even further."

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