Re: The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities

Re: The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities: "'t instantly figure out how to
market to minorities or would resist such efforts for fear of
inspiring imitators. Nor has the race discrimination argument for CRA
held up. A September 1999 study by Freddie Mac, for instance,
confirmed what previous Federal Reserve and Federal Deposit Insurance
Corporation studies had found: that African-Americans have
disproportionate levels of credit problems, which explains why they
have a harder time qualifying for mortgage money. As Freddie Mac
found, blacks with incomes of $65,000 to $75,000 a year have on
average worse credit records than whites making under $25,000.

The Federal Reserve Bank of Dallas had it right when it said—in a
paper pointedly entitled "Red Lining or Red Herring?"—"the CRA may not
be needed in today's financial environment to ensure all segments of
our economy enjoy access to credit." True, some households—those with
a history of credit problems, for instance, or those buying homes in
neighborhoods where re-selling them might be difficult—may not qualify
for loans at all, and some may have to pay higher interest rates, in
reflection of higher risk."

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