TV REVIEW : A Look at Loan Denials and Race

In “Your Loan Is Denied,” a co-production of “Frontline” and the Center for Investigative Reporting (at 9 tonight on KCET-TV Channel 28 and KPBS-TV Channel 15; at 8 on KVCR-TV Channel 24), reporter Bill Schechner is chasing down what may be one of the key culprits behind the Los Angeles unrest, and the rampant disenfranchisement of America’s minority poor. It goes by different names, and has different manifestations--including redlining and loan discrimination. Whatever it is, the victims know it exists, though no one appears to be taking responsibility for it.

Schechner is in the frustrating position of investigating something that looks like a duck, quacks like a duck and swims like a duck, but that regulating federal agencies (the Federal Reserve Board, the Office of the Comptroller of the Currency) aren’t ready to call a duck.

He is stuck between the hard place of talking to an upscale black couple like Peter and Dolores Green--turned down for a home loan on the kind of shaky grounds that suggest discrimination--and talking to Federal Reserve Governor John LaWare, who says that there’s “smoke,” and that “there’s some sort of fire . . . creating that smoke, but it’s hard at this stage of the game to tell just what that is.”

The smoke LaWare refers to is an October, 1991, Federal Reserve study charting clear patterns of race-based loan practices: Loan rejection rates for blacks are double that of whites, and while 21% of high-income blacks were rejected, only 14% of low-income whites were rejected.

While banks are legally required to explain a loan rejection, the explanations sometimes beg credibility: Chicago attorney Maria Saldana suspects something more than minor credit hiccups for Citibank turning down her loan request. Saldana and her husband, Donald, are taking the bank to court to find out.

It may be their only option, since Schechner’s report indicates that government regulators haven’t aggressively pursued consumer complaints. While the October study sent shock waves through financial institutions--perhaps fearful of a concerted federal response--no such response emerged. Congressional bills to press the case for targeting racist loan policies have died a quick death.

Meanwhile, fraudulent lending companies, filling the vacuum in inner-city areas deserted by banks, are charging inflated interest rates and bilking consumers desperate for a loan. The report never finds the duck behind all of this, but for the viewer, there’s no question that it’s out there, somewhere.