Ethical Practices in Banks Extension of Credit
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One area of banking activity that is closely related to ethical practices is the extension of credit. Changes have been leveled at banks and bankers for decades in relation to the extension of mortgage, business, and community development credit to members of minority population groups and to residents of neighborhoods and communities with predominantly minority group populations. The discriminatory and unethical practice of-which banking and bankers are accused is known as redlining. Many bankers and some economists, however, contend that banking is being criticized unfairly, and that loan denials to minorities are neither discriminatory nor unethical. This research examines the issue of discrimination in the context of race and ethnicity in the extension of credit as an ethical behavior in the banking workplace. Bias in lending on the basis of race and ethnic background has an extensive history--both actual and perceived--in the United States. Such bias is charged and investigated most frequently in relation to home mortgages; however, bias in the extension of business loans has also constituted a significant problem in American society over the decades. Discrimination in the extension of credit is volatile issue in the United States. Although federal government efforts to end such discrimination have been pursued for two decades, critics contend that much work is still required.7
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bligation to help meet the credit needs of the local communities in which they are chartered. This finding stemmed from the view that, as society represented by government has granted these institutions special privileges (charters to do business, deposit insurance, and access to the Federal Reserve discount window), these institutions have an obligation to serve the public, particularly that segment of the public in the communities in which the institutions are chartered. The CRA, thus, was intended to encourage lenders to continually communicate with the
members of their local communities about the credit needs of the community, and to help the members of their local communities to meet those local credit needs--particularly where low- and moderate-income neighborhoods were concerned. Additionally, the CRA was designed to provide guidance as to how regulatory agencies would assess the records of mortgage lenders in the satisfaction of their continuing and affirmative obligations to help meet the credit needs of their local communities, while continuing to fulfill the conditions of safe and sound financial operations.
The CRA was also motivated by a distrust in Congress of the willingness of executive departments, specificall
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Some common words found in the essay are:
Adoption CRA, Background Bias, Act CRA, HMDA Act, BANKING Introduction, Housing Act16, CRA CRA, Housing Act, Business Week, Act HMDA, basis assessment, business week, business week 15, basis assessment institution's, 15 1993, week 15, assessment institution's, week 15 1993, equal opportunity, racial ethnic, ethnic background, credit local, meet credit, home mortgage disclosure, racial ethnic background,
Approximate Word count = 2933
Approximate Pages = 12 (250 words per page)
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