Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, June 16, 1995 TAG: 9506160057
SECTION: BUSINESS PAGE: A-9 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Reno said the bill approved by a House Banking subcommittee ``turns back the clock on civil rights'' by restricting Justice's ability to initiate investigations under the Fair Housing Act.
``We have brought hundreds of cases protecting the rights of minorities who have been denied housing or have been rejected for a loan because of their race, gender or national origin,'' Reno said in a statement.
``It is unthinkable that the Justice Department would no longer be able to challenge patterns of discrimination.''
Reno's comments came as the House panel approved 13-6 the deregulation bill, sponsored by Rep. Marge Roukema, R-N.J., and Doug Bereuter, R-Neb. The bill also makes major changes in another fair-lending law, the Community Reinvestment Act.
Reno's comments were aimed at an amendment, sponsored by Rep. Bill McCollum, R-Fla., that would prevent her department from initiating Fair Housing Act investigations unless they had been referred by another regulator. Few major Fair Housing Act discrimination cases were referred by other agencies.
The amendment would have prevented Justice from initiating one of the government's most important fair-lending investigations in the 1990s: an $11 million settlement with Chevy Chase Federal Savings Bank.
The case broke ground because the government charged the bank engaged in illegal ``redlining,'' or refusing to lend to minorities, by not opening offices or marketing their services in black neighborhoods.
The amendment also would limit cases brought under the so-called ``disparate impact'' legal theory, which relies heavily on statistical analysis to discern gaps in loans and services for white and minority borrowers.
Doyle Bartlett, the Banking Committee's senior counsel, disagreed with Reno's statement and said Justice still could have a role in discrimination cases.
The bill's intent is to ``cut down on regulatory burden and unnecessary overlap'' by forcing the bank regulators and others to refer cases to Justice and not have the agency duplicate the functions of bank regulators.Bereuter, the bill's co-sponsor, said that by reducing regulatory burdens on the nation's banks and financial institutions, the bill would ``benefit consumers through new, better and less expensive products.''
Few consumer activists agreed. Lisa Donner, legislative director for the Association of Community Organizations for Reform Now, or Acorn, said the bill made major cuts in the Community Reinvestment Act that would exempt a majority of the nation's smaller banks from fair lending reviews.
``The only possible effect in the changes will be a decrease in credit reaching low and moderate income communities,'' Donner said.
The bill also would increase the liability from $50 to $500 for consumers whose automatic-teller machine cards were illegally used by someone else to withdraw money. The intent of the provision is to prevent reckless use of an ATM card, such as writing down the account's password on the card.
Consumers could be liable for the entire loss if someone illegally used their ATM or credit card and they didn't cooperate with the bank's investigation.
by CNB