IT is pretty much understood now that blacks have greater trouble getting loans than their white counterparts.
In 1991, for example, the Federal Reserve Board reported that nationally, blacks were rejected twice as often than whites when they applied for mortgages.
In 1988, both the Atlanta Journal and Constitution and the Detroit Free Press analyzed lending patterns in their cities and found that lending institutions were from three to four times more likely to invest in predominantly white neighborhoods than in minority communities of the same social and economic level.
And, in a 1987 report titled "Maintaining the Divided City," researchers with the Institute for Policy Studies at Johns Hopkins University found a pattern of racially-based lending disparities throughout the Baltimore metropolitan region. Last year, a study commissioned by the Baltimore Unemployed Council found "substantial and pervasive patterns of both racial discrimination and neighborhood redlining" on the part of six of the area's largest lending institutions.
The only issue that remains is why this is so. Are blacks less responsible or are loan officers racist? Do blacks fall victim to objective criteria that governs decision-making, or are those criteria fundamentally flawed and unfairly applied? Do the studies document the residual effects of society's racist past or the conscious and systematic attempts to keep racism alive?
"You're talking about a very complex situation and a lot of factors play into it," said Linwood M. Ivey, former director of the city's Urban Services Agency. Mr. Ivey, who is black, is a member of the board of American National Bank and chairs the bank's Community Reinvestment Committee. "Basically, loans are made on the basis of credit worthiness. A middle class black who has been on the job for a long time, has a good income and a strong credit rating can get a loan at practically any bank in Baltimore.
"If a black and a white came to a bank with the same salary, the same experience on the job, and they wanted to buy a house in the same neighborhood, I believe they would receive the same treatment," Mr. Ivey continued.
Unfortunately, the situation is rarely so neat in the real world.
Many of those same national studies that found disparity in lending patterns also indicate that blacks are proportionately more likely to have lower incomes, shakier credit and a more sporadic work history than whites. Even when income levels are similar, blacks are less likely to match the liquid assets of their white counterparts.
At the same time, banks remain reluctant to invest in certain areas and in certain kinds of families -- most notably in low- and moderate-income communities and in minority families with low and moderate incomes.
And finally, after all else is considered, the truth remains that bank employees -- from the tellers to the loan officers to the president -- carry the same prejudices and stereotypes as everyone else. Despite the objective criteria used to determine credit worthiness, a human dimension to decision-making inevitably remains.
"In general, banks do not aggressively market themselves in low income and minority communities," said Barbara Alsworth, a member of the Maryland Alliance for Responsible Investment. "Some of them simply do not have the orientation that there are profits to be made in those communities.
"But I don't want to disparage all banks," she added. "There are some that have begun to really extend themselves to market in traditionally under-served communities."
But not enough.
Perhaps we have spent too much time and energy trying to document the disparities and assign blame for the cause.
The true issue here is simple: The role of financial institutions is to provide capital for the communities they serve. And the overall community is not being served.
Experience indicates that when banks are committed to serving their communities, they not only find a way to do it, they make money.
Last week, NationsBank held a public hearing at Orchard Street Church offices of the Baltimore Urban League in order to solicit community input on how they can better serve traditionally under-served communities.
Bank officials heard from all of the usual suspects: the advocacy and consumer groups who push banks to invest in low and
moderate income communities.
But the best advice for NationsBank and the entire financial community is found in the commercials for Nike shoes: Just do it.
Wiley Hall is a columnist for The Evening Sun.