The government's top fair-lending cop warned Monday that the Justice Department plans to closely scrutinize credit-scoring systems.

"When we see disproportionate numbers of white applicants approved for credit despite a failing credit score or a disproportionate number of minorities denied credit even with a passing credit score, we become concerned that discrimination may be at work," said Bill Lann Lee, acting assistant attorney general for civil rights, in his first speech to the industry.

"Our concern is heightened when we learn that the lender is not documenting the reasons for the overrides or has a large number where 'other' is the listed reason."

Lenders at a Mortgage Bankers Association of America conference said they already are reviewing their credit-scoring systems for signs of discrimination. "This is consistent with where the industry is moving," said D. Steve Boland, first vice president for fair-lending at Countrywide Home Loans Inc. "We just need to be cautious to ensure no one is excluded."

"Nothing he said made me nervous," said Donald P. Brewster, a director at Residential Funding Corp., Bloomington, Minn.

Reiterating a pledge made Friday by Attorney General Janet Reno, Mr. Lee also said the Justice Department will crack down on discrimination in small-business lending.

In an interview after the speech, Mr. Lee said the department has several small-business cases under investigation. "We are not sure when they will go to court," he said.

All of the probes were spurred by minority small-business owners who complained to the Justice Department that they were illegally rejected for credit, he said.

Mr. Lee praised the New York banking department's prosecution of Roslyn Savings Bank, saying it should open the door to additional investigations by state regulators. "Roslyn is an important case because it means a major pattern and practice case can be resolved without being referred to the Department of Justice," he said.

When reviewing deals between lenders and state regulators, the Justice Department will investigate whether discrimination exists and whether the monetary settlement is enough to compensate victims and deter future violations. The department also will insist that all deals are made public, he said.

Mr. Lee also said banks that discriminate usually do not hold minorities to different credit standards. Rather, they are less willing to help minorities explain problems on their credit reports or document outside income.

"It appears this form of discrimination is rooted in some employees' indifference toward some minority applicants in contrast to an attitude of helpfulness toward nonminority applicants," he said.

Also at the conference, Eva M. Plaza, assistant secretary for fair- housing and equal opportunity at the Department of Housing and Urban Development, urged support for raising the maximum size of FHA loans.

"If there are more FHA loans, there will be more minority homeowners," she said.

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