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A 1" FEDERAL RESERVE BANK OF NEW YORK December 29, 1971 Nondiscrimination in Real Estat e F i n a n c i n g To All State Member Banks in the Second Federal R eserve District: The following statement was made public December 20 by the Board of Governors of the Federal Reserve System: The Board of Governors of the Federal Reserve System today issued a statement directing the 1,150 State chartered banks that are members of the System to give public notice that their real estate financing is nondiscriminatory. At the same time, the Board disclosed that it has been seeking to improve com pliance by banks under its supervision with civil rights legislation applying to real estate lending by use of a civil rights questionnaire in bank examinations. The Board's statement, and the questionnaire, are steps in a series of actions through which the Federal Reserve System is working with banks to encourage nondis criminatory lending and to help the public to understand and use its civil rights in the real estate lending area. The Board said it was issuing its statement because "increased public awareness of nondiscrimination requirements, and the availability of complaint procedures,” are necessary for affirmative implementation of those provisions of the 1968 Civil Rights Act directed at the real estate lending activities of financial institutions. The statement, to become effective March 1 — simultaneously with actions by other Federal agencies with regulatory responsibilities in the real estate lending field — called for banks and other lenders to display posters in their lobbies announcing that they are an "Equal Housing Lender" and giving directions for filing complaints. It also required that advertising signify nondiscriminatory real estate lending. Federal Reserve Bank examiners have been using a civil rights questionnaire (copy attached) in all regular bank examinations since October. Answers to the questions come from the examiners' observations of the banks' conduct of its affairs, or from informa tion supplied by the bank management. The examiner is authorized to conduct such in vestigation as is needed to secure information necessary to answer the questions. The questionnaire to monitor banks' compliance with the law also requires answers to questions which indicate the banks' knowledge of the Civil Rights Act. This statute makes it unlawful for a bank to deny a loan or other financial assistance for the purpose of buying, building, improving, repairing or maintaining a dwelling because of the loan applicant's race, color, religion or national origin. The questionnaire also directs atten tion to provisions making it unlawful to stiffen the term s of a loan in any way for such reasons. Prohibitions against discrimination, it is noted, apply also to any person a sso ciated with a loan applicant, any property owner, lessee or tenants and occupants. If a bank makes real estate loans, the examiner seeks answers to such questions as, how real estate loans made to minority group members compare to the bank's total real estate loans, relative to the proportion of minority groups’ population in the total service area population; whether the bank refuses to make loans in neighborhoods with high p er centages of minority populations; and if it makes loans to minority group members to purchase real estate in areas where there are no or few minority group persons. The new requirements in the Board's statement were described as "minimum pro cedures” for all financial institutions subject to the Board's supervision. They were: 1. Posting in the lobbies of banks — and each of their branches — display-size notices that the lending institution is an "Equal Housing Lender." These posters are to display a logotype symbol indicating nondiscriminatory real estate lending. The posters are also to assist the public in registering complaints, by providing a toll free number for reporting complaints to the Department of Housing and Urban De velopment from anywhere in the United States. 2. Prominent indication in the lender's advertising— whether the advertising is done directly or through a third party — that its real estate lending is free from discrimination. 3. Banning of "w ords, phrases, symbols, directions, form s, models or other means" that would imply discrimination. 4. Inclusion in advertising of the logotype symbol for nondiscriminatory lending. The Board*s statement affects State chartered banks that are members of the Fed eral Reserve System. Similar statements, applying to other banks — and savings and loan associations — are being issued by the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Federal Home Loan Bank Board. The Board has earlier taken other steps to implement civil rights legislation affect ing real estate lenders. These include: — A special course of study in Federal Reserve schools for bank examiners. The course, given to all examiners in recent schools, has been aimed at acquainting them with the provisions of civil rights legislation as they apply to financial institutions, with the objective of increasing their ability to encourage and monitor compliance. — In response to a request from the U.S. Treasury Department, at each bank exam ination, an inquiry is made by the bank examiner to determine whether all required Equal Employment Opportunity reports have been submitted to the Equal Employment Oppor tunity Commission and the U.S. Department of the Treasury. Additionally, examiners determine if banks employing 50 or more persons have on file a written Affirmative Action Plan for minority group employment. Examiners forward copies of their report to the Director of Equal Employment Opportunity, U.S. Treasury. Copies of those re ports that indicate questions as to compliance are forwarded to the Board's Director of Equal Employment Opportunity. Printed on the following page is the text of the Board of Governors' statement on non discrimination requirements in real estate financing. Copies of the logotypes to be used in lenders' prem ises and in advertising, and of the questionnaire in use by Federal Reserve Bank examiners, are enclosed. Additional copies of this circular and its enclosures will be furnished upon request. Alfred Hayes, President. STATEM ENT on C i v i l R igh ts A c t N on d iscrim in atio n Requirem ents in R e a l E s t a t e L o a n A c t i v i t i e s Section 805 of Title VIII of the Civil parties engages in any form of advertising Rights Act of 1968 (42 U .S.C. 3605) makes it of real estate lending services shall prom i unlawful for any bank, building and loan asso nently indicate, in a manner appropriate to ciation, insurance company or other corpo the advertising media and format utilized, that the financial institution makes real estate ration, association, firm , or enterprise whose loans without regard to race, color, religion, business consists in whole or in part in the making of real estate loans, to deny a loan or or national origin. No words, phrases, sym bols, directions, form s, models or other other financial assistance to a person applying means shall be used to express, imply, or therefor for the purpose of purchasing, con suggest a discriminatory preference or pol structing, improving, repairing, or maintain icy of exclusion in violation of the provisions ing a dwelling, or to discriminate against him in the fixing of the amount, interest rate, of Title VIII of the Civil Rights Act of 1968. Written advertisements relating to real estate duration, or other terms and conditions of such loan or other financial assistance, be loans should include a facsim ile of the logo cause of his race, color, religion, or national type which is attached in order to increase public recognition of the nondiscrimination origin. Recognizing that increased public aware requirements and guarantees of Title VIII. ness of nondiscrimination requirements and 2. Lobby Notice of Nondiscrimination the availability of complaint procedures is Compliance. necessary for effective implementation of the After March 1, 1972, every institution engaged in extending real estate loans shall Civil Rights Act’ s provisions imposed on conspicuously display in the public lobby of financial institutions, the Comptroller of the each of its offices a notice that incorporates Currency, the Federal Deposit Insurance a facsim ile of the attached logotype and attests Corporation, the Federal Home Loan Bank to that institution’ s policy of compliance with Board and the Board of Governors of the the nondiscrimination requirements of Title Federal Reserve System have adopted the VIII of the Civil Rights Act of 1968. Such following as minimum procedures to be notice shall include the address and phone utilized by all financial institutions subject to number of the Department of Housing and their supervisory authority. 1. Advertisement Notice of Nondiscrim Urban Development as the agency to be notified concerning any complaint alleging a ination Compliance. violation of the nondiscrimination provisions After March 1, 1972, any financial in of Title VIII. stitution which directly or through third FR 858 (Rev. 12-71) (Name and Address of Bank) (Date of Examination) CIVIL RIGHTS QUESTIONNAIRE Pursuant to Scction 805 Title VIII of the Civil Rights Act of 1968, it is unlawful for a bank in c onnection with loans or other financial assistance, because of the race, color, religion or national origin of (1) loan applicant, (2) any person associated with the loan anplicant, (3) any present or prospective owner of the dwelling, (4) an> lessees (5) any tenants or occupants, to deny a loan or other financial assistance for t h e purpose of p u r c h a s i n g , c o n s t r u c t i n g , i m p r o v i n g , r e p a i r i n g , or m a i ntaining a dwelling. Further, it Is unlawful in connection with any of the loans mentioned to discriminate in the fixing of (a) amount, (b) interest rates, (c) duration, or (d) other te rms. In an effort to determine the bank's knowledge and compliance with this law, the examiner is requested to complete the following questions from information obtained from personal observations and investigations as well as information supplied by bank management. (Circle appropriate answer where indicated; otherwise supply data requested.) 1. Does thr. bank make loans for residential purposes, including: a. b. c. 2. 3. 4. 5. 6. 7. 8. 9. 10. Purchase C onstruction Improvement, repair, and m a intenance Yes Yes Yes No No No Are the bank's loan officers and executive m a n a gement aware of the provisions of Title VIII of the Civil Rights Act of 1968? Yes No Is a notice posted in a conspicuous place in the bank notifying the public of the provisions of the above me ntioned law? Yes No Does the bank include a statement as to its n o n d i s c r i m i n a t o r y practices in all advertising of real estate loans? Yes No What is the estimated p o p u lation of the bank's p rimary service area? _________ What is the estimated minority grou pl^ p opulation of the bank's p rimary service area? _________ What is the estimated number of residential real estate loans mad e by the bank during the past calendar year? _________ What is the estimated number of residential real estate loans made to m i n ority group borrowers during the past calendar year? _________ What is the estimated number of residential real estate loan applications received during the past calendar year? _________ What is the estimated number of residential real estate loan applications received from m i n ority group members during the past calendar year? _________ For the purpose of this form, m i n ority group is defined as Negro/Black, American Indian, Spanish American, Oriental or Other Minorities (such as Eskimos). Members of the white race are considered non-minority. (Over) FR 858 (Rev. 12-71) -211. Are there nei g h b o r h o o d s or other areas of high concentrations of m i n o r i t y group m e m b e r s in wh i c h the bank refuses to m ake real estate loans? If so, specify area and reasons for auch refusal. 12. Does the bank refuse to mak e loans to members gf niinqrifey groups seeking to purchase residential property in ayeas *here £her§ are no or few mi n or i t y group residents? If fi0, specify area and reasons for such refusal. 13. 14. 15. Are there any residential areas with high concentrations of m i n o r i t y group members with i n the bank's primary service area where the ban k has no or relatively few residential real estate loans? If so, spee^fy areas and reasons for such. Are there any residential areas w ith no or few minority group mem b e r s w i t h i n the bank's prim a r y service area where the bank has no, or relatively few, residential real estate loans? If so, specify areas and reasons for such. Are loan terms, i.e., amount, interest rate, duration etc., set w i t h o u t regard to borrower's race, color, religion or national origin? Yes No Yes No Yes No Yes No Yes No EQ U A L HOUSING POSTER ______________ 10” X 10” or proportional enlargement or reduction. EQUAL HOUSING LENDER T I T L E VIII O F T H E C I V I L R I G H T S A C T O F 1 9 6 8 P R O H I B I T S D I S C R I M I N A T I O N IN R E A L E S T A T E L E N D I N G . C O M P L A IN T S SH O U LD B E S E N T TO: HUD W A S H I N G T O N , D .C . 20410 CALL TOLL FREE 800-424-8590 (In Wa s h i n g t o n D. C. 755-5490) advertising logo
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