A.G. Reno Backs Disparate Impact Test; Involves U.S. Attorneys in Housing Enforcement

Attorney General Reno told the Friday lunch meeting of the Summit that the U.S. Department of Justice "is seeking no less than elimination of discrimination from the lending industry." Stating it is the soundness of the loan not the color of the skin that dictates lending practices," Reno set a course of action for enforcement measures to end housing discrimination.

Reno also outlined a number of other areas in which she is moving to enforce fair housing law: initiation and litigation of more "pattern or practice" cases; random testing; use of the disparate impact test of discrimination, making intent irrelevant; "beefing up" the Civil Rights Division task force; and involving more U.S. attorneys in fair housing litigation.

Attorney General Reno reminded the Summit that during her confirmation process she had said, "'The enforcement of civil rights laws would be one of the highest priorities of my office."

Reno Reverses Reagan Era on Intent

Reversing one of the most regressive positions from the Reagan era, Reno said the Department intended to employ the disparate impact theory, so that intent does not have to be shown. She said today's discrimination is subtle, and that racial animus or deliberate premeditated acts of discrimination don't have to be present to violate the law. "...When the consequences cause disproportionate harm to those protected by the law it is discrimination." Reno declared, "It makes no difference if discrimination is intentional or not. As long as it exists the Justice Department will take notice and if necessary, prosecute." She added that the Department is committed to using all legal theories approved by Congress and the courts to establish violations that they believe exist.

93 District Attorneys To Be Involved

The Attorney General said the Department had reallocated funds to increase the Housing and Civil Enforcement Sections of the Civil Rights Division by about one-third. She said they would draw on resources outside that Division and that the responsibilities of 93 U. S. Attorneys Offices had been expanded to include fair housing cases. Reno said she met with each U. S. Attorney candidate "...before I recommend their nomination to the President, and I make sure of their commitment," to civil rights.

Reno had high praise for HUD Secretary Henry Cisneros and his emphasis on getting the agencies together. She cited cooperation involving the Justice Department, the U. S. Marshals, the FBI and HUD to ensure the safety of several African-American families who moved into public housing in Vidor, Texas.

The Attorney General said, "We are going to go after discrimination in all its forms." This will include discrimination in lending including the whole underwriting apparatus.

She said the Department brought more pattern or practice cases in 1993, than in any year since the law was amended. Reno said, "Testing enables us to target areas that statistics show are racially segregated, areas that are ripe for housing discrimination ...Testing is a very effective weapon and we will continue to use it in our battle to eliminate housing discrimination." The testing program has been implemented in a dozen cities, and results produced in California, Michigan and South Dakota.

Vicksburg Bank Pays $800,000 For Charging Blacks Higher Interest

She announced that the Department settled discrimination cases against two banks. The First National Bank of Vicksburg, Mississippi, will pay $800,000 in penalties and fines for charging blacks higher interest rates than whites on home improvement loans and will also set aside $1 million for low-and moderate-income borrowers. Blackpipe State Bank in Martin, South Dakota, will create a $125,000 compensation fund for discriminating against Native Americans in credit requirements and interest rates.

(Pages 1 & 2 taken in part form The Daily Eve, the Summit newsletter.)