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Home arrow Press Center arrow FED Requires Banks to Ask Race of Home-Loan Phone Applicants
FED Requires Banks to Ask Race of Home-Loan Phone Applicants PDF Print E-mail
Monday, 24 June 2002
Contact: David Gersten
(703)421-5443

Linda Chavez Says New Rule Will Result in “More Discrimination, Not Less”

(Sterling, VA) Last Friday, the Federal Reserve Board announced it will, for the first time, require lenders to ask telephone home-loan applicants their race, ethnicity, and sex.  Today, Center for Equal Opportunity president Linda Chavez predicted the new requirement will lead to more discrimination.  The Fed announcement and links to the new rule are located at www.federalreserve.gov/boarddocs/press/bcreg/2002/20020621.

    “There is no good reason to require lenders to inquire into a prospective homeowner’s race,” said Chavez.  “The end result is going to be more discrimination, not less.”  She pointed out that up until Friday many lenders would not even know the race of an applicant, but now they will.  “I suspect that some people hope that this step will result in lenders adopting de facto quotas in their lending,” she added. 

CEO had opposed this decision, for the reasons discussed in a column by general counsel Roger Clegg on National Review Online, at www.nationalreview.com/clegg/clegg021402.asp.  While the Federal Reserve Board claims that such rules will “provide data that assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes,” Clegg argues that by giving lenders racial data, minority telephone applicants “have made racial discrimination possible when before it wasn't.”
 
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Linda Chavez on Bill Moyers Journal (PBS)