n discrimination in business lending and discrimination in lending generally.
An assessment of the position of the proponents of setting aside special funds for the extension of business credit to low-income persons is presented in Chapter 2, while an assessment of the position of the opponents of the concept is presented in Chapter 3. Conclusions drawn from these assessments are presented in Chapter 4.
The background information necessary for conducting the assessments presented in Chapters 2 and 3 is presented in the remainder of this introductory chapter. A brief history of the issue of discrimination is followed by an examination of the bases on which such discrimination is most frequently effected. Specific programs--the Community Reinvestment Act (CRA) and the Small Business Administration (SBA)--designed to make credit more accessible to members of ethnic and racial minorities, low income persons, and women are reviewed, and recent lending performance by financial institutions is discussed. Lastly, definitions of terms that are relevant to the study purpose are presented in this chapter.
The Issue of Discrimination in Lending
Discrimination in the extension of credit is volatile issue in the United States (Smith, 1993, p 65). Although federal government efforts to end such discrimination have been pursued for two decades, critics contend that much work is still required (Foust, 1992, p. 43).
Discrimination in lending is a part of the larger problem of housing discrimination (Srinivasan, 1994, pp. 13-27). Discrimination exists in the United States with respect to a variety of factors. The most publicized form of discrimination is that associated with racial and ethnic background. Such discrimination is also based at times on age, sexual preference, behavior, and other factors. The means by which discrimination is applied to lending vary. Overt refusal to lend money to an individual because of racial or...