Two lawsuits recently filed by Sinclair National Bank have exposed an alarming pattern of racial discrimination and insensitivity to low-income borrowers at the Office of the Comptroller of the Currency.

Sinclair is a small institution operating in Arkansas and Missouri that focuses its lending efforts on lower-income and minority borrowers in the so-called nonprime market.

An article on the lawsuits in the Nov. 21 American Banker [“Arkansas Banker Sues OCC for Breach of Contract, page 4] describes serious allegations that OCC employees made racially hostile remarks about its borrowers and then aggressively sought to shut down the bank’s nonprime lending program. The OCC did this despite Sinclair’s success and the successful performance of its portfolio.

The article also describes the OCC’s reaction when faced with these allegations — a denial that anything was wrong and an attempt to bury the bank in an avalanche of punitive and arguably unlawful regulatory actions.

As a six-term former congressman from Missouri and as someone consulted early on by Sinclair as this shameful drama was unfolding, let me tell you what I told directly to the highest levels of leadership at the Comptroller’s Office: The behavior of OCC representatives in the field in this matter was disgraceful and disheartening.

What’s more, the agency adopted a see-no-evil approach to its examiners’ conduct — an unfortunate and all too familiar response to unlawful discrimination.

Given the number of years I spent in Washington working with federal agencies, I am extremely disappointed in the OCC’s failure to properly respond to these types of allegations.

An examination at Sinclair has been going on in one form or another for months, a highly unusual event for an institution of this size. At times, the OCC sent more examiners into this tiny $27 million-asset bank than there were employees and customers combined.

It appears that this overkill is an effort by the OCC to justify erroneous conclusions it had already formed in advance about the bank’s minority and nonprime lending program. These conclusions were made even before the examiners ever looked at the loans! That is why Sinclair went to court, in desperation — not to hide the fact about its operation, but to get them all out on the record.

Even if one gives the OCC the greatest benefit of the doubt, and even if one excuses the examiners’ derisive references to “these people” with “funny names,” the OCC’s unwarranted attack on Sinclair is emblematic of OCC’s policy failures in the area of “nonprime lending.” Loans made to this segment of the market, the reasoning goes, are especially risky and dangerous and require special skill.

This makes it all the more troubling that the OCC sent examiners to Sinclair who stated more than once that they had little experience in supervising nonprime lending. Because of the special skill required to deal with this complex area of banking, Sinclair requested supervision by examiners with more experience in the subject, even if it invited more scrutiny and a heavier regulatory burden. These pleas were ignored.

The OCC owes it to the public as well as Sinclair to treat this controversy with less condescension and without reflexive bureaucratic circling-the-wagons aggression, and to give its own behavior the same level of scrutiny it is supposed to apply to those it supervises. Surely, a way can be found to regulate banks in a fair environment with knowledgeable regulators who at a minimum do not voice an intention to discriminate.

Mr. Wheat is president of the Wheat & Associates public affairs firm in Washington

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