Racial Profiling of Borrowers: An Idea Fraught With Peril

October 1, 2002

James Rockett

In the early 1970s, during my first days as a banking lawyer, I was anxious to purchase my first home and, as was the custom in those days preceding the impact of Burt Lance, I was referred by my bank employer to a correspondent bank. The scene that followed is forever etched in my memory. I met the banker, a middle-aged man with polished nails, a black tailored suit, white shirt and wide suspenders who condescended to consider the business of a young lawyer. After explaining my excitement about the old Victorian home in a transitional area of San Francisco that I hoped to buy, I asked if his bank would provide the mortgage financing. He peered at me with a quizzical look and drew himself up in his chair: “Young man, if you want to live in an area with all of those blacks [not the pejorative phrase he actually used] don’t expect our bank to assist you. Good day.” Unfortunately, in those days, as our country was coming to terms with recently enacted civil rights laws and efforts to create a society that treated all persons fairly, lending discrimination based on race was real. It was widespread; it was overt; and it was largely ignored. Banking was the bastion of the white, economically advantaged male and not much consideration was given to those who fell outside a fairly narrow band of bank customers.

Racial Profiling of Borrowers: An Idea Faught With Peril