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Ethical Practices in Banks Extension of Credit

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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Ethical Practices in Banks Extension of Credit. (1969, December 31). In LotsofEssays.com. Retrieved 03:49, November 26, 2014, from http://www.lotsofessays.com/viewpaper/1690391.html