European Stars and Stripes (Newspaper) - October 23, 1991, Darmstadt, Hesse                                Page 18 the stars and stripes wednesday october 23, 1991money matters minorities lag behind Whites in mortgage approval rates pc by the Washington Post Washington a lower income White Home buyers were More Likely to be approved for a mortgage last year than wealthier Blacks the Federal Reserve Board reported monday in the most comprehensive National study of mortgage ending the government has Ever undertaken. Documenting widespread racial differences in mortgage approval rates the study showed that minority Home buyers were turned Down for Home mortgages two to three times More often than White Home buyers. Federal Reserve officials acknowledged that their statistics show a discriminatory results a but they stressed that More information would be needed to prove that lenders Are practising racial discrimination which is forbidden by Federal Law. A i find these data very worrisome a said Federal Reserve Board member John Laware who promised that the Federal Reserve will Tell its examiners to look carefully at the mortgage lending practices of specific Banks where there is a wide disparity in the rejection rates of Blacks and Whites. The nationwide study of 5.3 million mortgage applications made in 1990 showed that Whites were approved for mortgages More often than Blacks and hispanics in every City and every income group in predominantly Black neighbourhoods or White in Rich communities or poor. The study covered All Banks and savings and Loans in the country. Federal Reserve officials said some of the disparity in mortgage approval rates is due to the differences Between the financial resources and incomes of the applicants rather than racial discrimination. However senior fed economist Glenn canner pointed out the one discrepancy that is hardest to explain on any other basis White borrowers in the lowest in come category were approved for mortgages More often than Mack borrowers in the highest income group. The highest income borrowers Are families with incomes More than 20 percent above the median income in their Community. The lowest income borrowers As measured by the study Are those whose family income is More than 20 percent below the median. The median is the midpoint in prices the level at which half the Homes Are More expensive and half Are less expensive. In the Washington area for example where the median family income is $55,000, the High income group would include families making More than $66,000 a year and the Low come group those earning less than $44,000. The study found the Low income Whites nationally were approved for 69 percent of their conventional Loans while Blacks in the richest group of buyers were approved for Only 65.7 percent of conventional Loans. Low income Whites were approved for 76.5 percent of Cha and a Loans while higher income Blacks got approvals on 68 percent of government backed Loans. Among the most affluent applicants the rejection rate for conventional mortgages was 21.4 percent for Blacks 15.8 percent for hispanics 11.2 percent for asians and 8.5 percent for Whites. Laware the Federal Reserve boards Bank regulation specialist said a it May be discrimination. It May be something entirely different. In a not prepared to say there is discrimination going on Here until we have gotten into it  but David Glenn president of the Federal Home loan mortgage corp. Freddie Mac the nations second largest provider of funds for mortgages said the report is Only the latest of Many studies to show a definitive patterns of discriminatory lending practices in the mortgage  in a speech to a group of mortgage Bankers in new Orleans he said a whether these patterns Are deliberate or inadvertent is not important. Whether the statistics and data Are perfect or flawed is not important. The pattern of discrimination that these separate studies have found must be  the american Bankers association however released an academic study which it paid for contending that the Federal Reserve study does not prove discrimination because it does not take into account the financial resources and credit history of the More than 5 million mortgage applicants. Only by looking at every application can it be determined whether lenders Are discriminating the Aba study argued. This View Drew immediate criticism on Capitol Hill. A it matters not whether the discrimination is intentional. Discrimination by ignorance is just As hurtful and just As destructive As discrimination by design a said House banking committee chairman Henry b. Gonzalez. A Texas. Who co sponsored the legislation that required the study. Mortgage lending rejection rates Here Are the results based on More than 3 million applications for Home Purchase mortgages considered in 1990 by 9,300 financial institutions released monday by Federal regulators. 2t.4 12.9 14.422.4 asians Whites hispanics american Blacks India slow income applicants incomes below 60 percent of the median in their metropolitan area Asje i a a a a a a a a Pmj a a Mumm asians Whites hispanics american Blacks Indian High income applicants incomes More than 20 percent above the median in their metropolitan area 21.4 a a _ asians Whites hispanics american Blacks indians source Federal financial institutions exam councils amps Wes Booher tax Cut planners agree on deductible iras by Jim Luther a tax writer Washington a democrats and republicans in Congress Are poles apart on key elements of a tax Cut but they see Eye to Eye on one popular idea fully deductible individual retirement accounts should be available to All taxpayers regardless of income. More than three quarters of the Senate and a majority of House members have endorsed one or More Ira plan. Competing tax Cut plans offered by democrats and republicans and billed As stimulants for the Economy include iras. A we must take Steps to boost savings to maintain a level of Prosperity americans deserve a sen. Lloyd Bentsen a Texas chairman of the Senate finance committee said monday in announcing that his pro posed tax Cut would include deductible iras of up to $2,000 a year for All wage earners. Despite the popularity of the Ira some economists question the advisability of offering tax incentives for savings at a time when a Lack of consumer spending is prolonging the recession. A there Are Only two things a consumer can do with a Dollar a save it or spend it a noted sen. Bob pack Wood of Oregon senior Republican on the Senate finance committee. He said Congress will have to decide whether the More important goal at the moment is to Spur the Economy with consumer spending or boost the nations lagging Long term savings rate. Iras were a popular device to encourage savings in the Early 1980s, when any worker could avoid immediate taxation on up to $2,000 a year and the interest it earned by putting the Money into the accounts. Economists still disagree whether they actually produced More savings but in 1986, fully deductible iras were taken away from Middle and upper income workers with company pensions. Bentsen included Universal iras As part of a plan to Cut taxes by $72.5 billion Over five years financed by a reduction in defense spending. The other part of the tax plan would give a credit of $300 a year for each child age 18 or under in a family. That proposal outlined sunday set off a wave of tax Cut fever. President Bush a spokesman said that As Early As this week Bush is Likely to weigh in with his own plan entered around a Cut in taxes on capital gains which apply to profits on the Sale of investments. The president is working with congressional republicans on a single  Boom boosting sales for . Businesses Dallas apr its Boom time again in the baby business. About 4.2 million babies were born in the United states last year the most since 1964, and the baby products Industry is cooing. A people Are having fewer children but More people Are having them a said Maura Davis of the juvenile products manufacturing association. Sales of baby products other than clothes and food in 1990 totalled $2.5 billion up from $850 million in 1980. The glow was Clear at the associations annual exhibition in Dallas last week. About 330 manufacturers attended 50 More than last year. Exhibitors ranged from Dean Smith of Atmore ala., who just entered the business with a simple Cotton diaper to Well known giants such As Fisher Price and Texas instruments inc. With their sophisticated toys. 1 hey acknowledged some effects of the recession however. The association estimates growth of 4 percent to 5 percent this year Down from the 10 percent increases of the late 1980s. But Davis said demographics Are on the Industry a Side. The baby Boomers born in the 1950s and Early 1960s Are having children of their own. Forty percent of the babies born last year were to first time parents those who spend the most to equip their Homes for a Newborn. Baby product companies Are also getting a boost from changed family structures such As when step family members also spend on a baby said Shirley Pepys the associations president. Such trends have led Dallas based Texas instruments to expand its popular school age line of educational toys Down to the infant level. The company a newest baby product is a stacking toy that forms the face of a Clown and talks teaching colors and parts of a face. The $40 a stack a round Clown will be available in some parts of the country by Christmas. When first time participant Dean Smith figured he had spent More than $2,000 on disposable diapers for his first child he started looking for a cheaper alternative. Smith designed a Cotton diaper that stretches without elastic and adjusts with velcro. His Cotton Bottoms one of several brands now on the Market Are sold in some stores in the South and he was looking for More buyers at the show. In addition to monitoring demographic trends the association has administered a safety certification program for 15 years to give customers some Quality Assurance. Products that earn certification May display an association Seal on the merchandise and in advertising