Volume 2, Issue 11

Washington, DC: 10-3-94

In a Business Week editorial, Paul Craig Roberts recently addressed lending bias in banking, money racism if you will. A study, found to be flawed by the FDIC, has been used to block a bank's expansion plans unless the bank opens up lending centers in minority areas and offers below market loans to minorities. In other words, banks must hand out special privileges in order to avoid being labeled racist.

Environmental racism claims that business/industry seeks out minority neighborhoods to prey on the unsuspecting minority population. Never mind that the business is expanding to meet increasing market demand or that this expansion often brings much needed jobs and business in general to the area and that these are often industrial park type areas already. On the other hand, lending bias, money racism, claims that banks specifically choose not to go into financial high risk areas (imagine that). In essence, environmental racism fights against bringing business into minority neighborhoods but bringing business into minority neighborhoods appears to be exactly what the government is trying to do in their version of fighting lending bias. Maybe both regulatory groups could achieve their objectives if the head of the Justice Department and the EPA director would switch jobs.

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