WASHINGTON - The Justice Department clarified its fair-lending policy late Friday, saying it "rarely" will prosecute a single act of discrimination.

"At the Department of Justice we expect to focus on patterns and practices of lending discrimination, which would normally rest on more than one instance," wrote Deval L. Patrick, assistant attorney general for civil rights. "The only 'one instance' pattern or practice would be an act that provided direct evidence of discrimination."

Mr. Patrick, in a 10-page letter to the banking trade associations, also said the department will not undertake disparate-impact cases unless the impact is "significant" and the department finds no "business necessity."

He said the department would prefer to fix a bank's policy in disparate-impact cases, rather than punish the bank.

Also he said the department is not trying to enforce the Community Reinvestment Act. "CRA performance may be relevant, but in our view it is not dispositive," Mr. Patrick wrote.

He said that "niche" marketing of certain loan products is allowed, provided the bank treats everyone consistently. And he said the department will not base fair-lending investigations on the results of a bank's self- testing.

The banking trade associations reacted cautiously to Justice's latest fair-lending policy clarification, saying it fails to spell out what bankers can and cannot do.

"There are a lot of gray areas in it," said Joe Belew, president of the Consumer Bankers Association. "But the one thing that comes through is that the Justice Department has heard the industry's concerns."

In October, in the wake of the controversial Chevy Chase settlement, seven trade groups asked the Justice Department to clarify its fair-lending policy.

The trade groups will meet in early March to draft a second letter seeking greater clarity, according to Bankers Roundtable general counsel Richard Whiting.

Paul A. Schosberg, president of America's Community Bankers, said he is particularly pleased with Mr. Patrick's comment that Justice will not base fair-lending complaints on compensation and hiring practices. The department had required banks settling cases to hire more minorities and to eliminate pay policies that discouraged small loans.

"We saw a concern lenders had with whether the direction Justice was moving in would lead to hiring quotas and the like," Mr. Schosberg said. "I think it is now clear that that is not the policy."

Mr. Schosberg also said he approves of Justice's comment that bank regulators, who have more resources, must resolve the bulk of the fair- lending complaints.

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