DISCRIMINATION IN LENDING: RACIAL MINORITIES This research examines the practice of discrimination in bank lending in relation to racial minorities. One purpose of this examination is to establish that such discrimination occurs. A second purpose is to consider such discrimination within the context of the social science theories that may offer explanations for the practice of discrimination in lending against racial minorities.
Establishing the Existence of Discrimination
in Lending Against Racial Minorities
Discrimination in the extension of credit is volatile issue in the United States (Smith 65). Although federal government efforts to end such discrimination have been pursued for two decades, critics contend that much work is still required (Foust 43).
Discrimination in lending is a part of the larger problem of housing discrimination. 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 ethnic background is not only illegal in the United States, it is also relatively rare. Such legal prohibitions are often circumvented in a number of ways, however, such as
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