Fair Lending: A Storm Is Brewing On Two Fronts

Private Lawsuit Filed against NationsBank
0n September 21,1995, the Washington Lawyers Committee for Civil Rights and Urban Affairs announced that it had filed a >
This is the first significant >
HUD-funded Testers Investigate Insurance Companies
The National Fair Housing Alliance has reported results of a testing project which was supported by HUD funds. The project tested insurance companies, including companies that sell property insurance nationally. Tests were conducted over the phone, using callers with identifiable voice and speech attributes. Testers inquired about the availability, terms, and price of insurance. The group's testers reported treatment such as being quoted higher rates based on the race of the caller, and reluctance or an outright refusal to provide insurance in minority neighborhoods.

This study comes hard on the heels of the settlement reached between the U.S. Department of Justice and American Family Mutual Insurance Company. In that case, the Department of Justice made similar allegations of refusal to insure properties in certain locations, and opening and closing offices in locations designed to avoid providing service to minority customers.

On the one hand, the attention now being given to insurance companies takes some pressure off of banks. In fact it supports banks' statements that they have been willing to make loans but customers have been unable to get property insurance. These developments should also direct more attention to insurance companies as essential players in the home purchase and financing process. On the other hand, findings this strong support allegations that discrimination does exist. Evidence such as this will be used to argue for stronger enforcement.

Copyright © 1995 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 1, 11/95