Japanese-Owned Banks Accused of Discriminatory Lending With AM-Japan-Americans Reax, Bjt
BOSTON (AP) _ A group that promotes lending in minority communities accused five major Japanese banks Monday of discriminatory lending practices through their U.S.-based subsidiaries.
On the eve of a trip to Japan, the Rev. Charles Stith, president of the National Community Reinvestment Network, said a California-based study shows Japanese banks made only six home loans to low-income blacks throughout the state and that it was four times harder for an Asian Americans to receive a home loan than a white person.
″The track record of lending by these banks is abysmal,″ Stith told a Boston news conference, just after a breakfast celebration to commemorate Martin Luther King Jr.
The study also found that although the banks had $37 billion in assets in California, they made only 3,287 home loans to California’s 30 million residents of all races, including whites. Most of those loans were made by the Bank of Tokyo. The Bank of America, with $84 billion in California assets, made 24 times as many home loans.
The study says the banks made virtually no loans to minorities, and that most of the loans that were made went to affluent minorities. In 1990, the five banks made only 68 loans to California’s 2.5 million blacks. Most of those loans - 63 - were made by the Bank of Tokyo, which has an agreement with one of the groups that conducted the study.
The banks made 224 loans to California’s 8.3 million Hispanics, and 513 loans to California’s 3 million Asian-Americans.
Stith will visit Japan for 11 days to talk with bank leaders and Japanese officials. His trip comes just weeks after President Bush traveled to Japan to discuss trade, and as Japanese trade barriers become an increasingly important issue in the 1992 presidential campaign.
The five banks cited in the study were subsidiaries owned by Sumitomo, Mitsui Taiyo Kobe, Sanwa, Mitsubishi and the Bank of Tokyo. These five banks have worldwide assets of $1.8 trillion, or more than four times the aggregate assets of all banks doing business in California.
Stith distanced himself from what he called ″Japan-bashers,″ but said Japanese attitudes toward American blacks may well have influenced the banks’ lending practices.
″I think one can only conclude that a real issue with the kind of lending practices we have seen is racism,″ Stith said.
A number of Japanese leaders have made derogatory remarks about American blacks in recent years. Former Prime Minister Yasuhiro Nakasone in 1986 attributed relatively low intelligence scores in the U.S. to blacks and Hispanics.
A former justice minister, Seiroku Kajiyama, likened the presence of prostitutes in Tokyo’s business district to blacks moving into white neighborhoods in the United States.
At one of the banks cited in the study, San Francisco-based Union Bank, Vice Chairman Richard Harnack told the Los Angeles Times that the bank grew from members of several business-oriented banks and gets few home loan applications. Union Bank is controlled by Bank of Tokyo.
The newspaper also reported Monday that Sanwa Bank California Vice President Margaret A. Merrett said the Los Angeles bank made few home loans in 1990 partly because it was revamping operations.
Nobody answered telephone calls to the other bank offices Monday for a response to the study. Monday was a bank holiday to honor the celebration of Martin Luther King Jr.’s birthday.
But Tom Marsilio, vice president of the Institute for Financial Affairs Inc. of Japan in New York, a research group under the jurisdiction of the Japanese government that deals primarily in banking issues, disputed the study’s findings.
″I wouldn’t say that. I would certainly refute that in every way,″ he said.
All five banks are members of the institute. Although he did not have statistics of his own and said he wasn’t familiar with the figures in the study, Marsilio said that Japanese banks are well aware of community reinvestment issues.
″They’ve seriously addressed these things and I believe they’ve been concerned about them for quite some time,″ Marsilio said.
The study of lending practices was conducted by the Greenlining Coalition, a coalition of minority and consumer groups, and the National Community Reinvestment Network, which has member organizations in 30 communities nationwide.