WASHINGTON -- Regulators sent letters to every bank and thrift in the country on Thursday warning that enforcement of antidiscrimination laws will be stepped up.

The heads of four bank and thrift agencies urged institutions to increase lending to minorities. They also detailed new government initiatives to detect bias by lenders.

The regulators said they will cooperate with other agencies, like the Justice Department and the Department of Housing and Urban Development, to prosecute lenders that break the law.

"Our agencies are committed to making sure that financial institutions understand their fairlending obligations and respond appropriately," the letter says. "We will continue to strengthen and refine our fair-lending enforcement activities.

Signed by Top Regulators

The announcement marks the first public, coordinated effort by regulators this year on fair lending. The five-paragraph letter is signed by the heads of the Federal Reserve Board, Federal Deposit Insurance Corp., Office of Thrift Supervision, and the Office of the Comptroller of the Currency.

The regulators presented the letter as evidence of their commitment to effective enforcement of fair-lending laws. The agency heads warned that they expect all financial institutions to design programs ensuring access to credit on a nondiscriminatory basis.

The agencies said they "are deeply concerned that some minority consumers and small-business owners may be experiencing discriminatory treatment in their efforts to obtain credit from financial institutions."

The regulators outlined 11 specific steps banks and thrifts can take to improve minority lending.

These include:

* Internal second-review systems for consumer, mortgage, and small-business loan applications that would otherwise be denied.

* Enhanced employee training.

* Flexible underwriting and appraisal standards.

* Affirmative marketing and programs to ensure that credit is available on an equitable basis.

"It is clear to the agencies that more needs to be done to assure equal access to credit by everyone in our country," the agency heads wrote. "We expect all financial institutions to participate in this effort."

The joint effort follows several separate initiatives recently announced by the agencies.

Comptroller's |Top Priority'

Eugene Ludwig, the new comptroller, has been the most outspoken, announcing new examiner guidelines and a plan to use undercover agents called "testers" to detect discrimination. He has said fighting loan bias will be his top priority.

The joint letter also follows cues from other government agencies. The Justice Department and HUD have signaled that they are stepping up enforcement of fair-lending laws.

"I think the regulators have made it very clear they are going to be looking very closely at lending bias," said Virginia Stafford, American Bankers Association spokeswoman. "We believe our members are aware of the importance of the issues and are taking steps to strengthen their fair-lending programs."

"This is an attempt to show that they are going to work together as a group," she added. "But it is not going to be a surprise to our members."

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