New Kennedy, old solutions - Joseph P. Kennedy II fights discrimination in lending

LATE ONE Thursday evening, as the House rushed to push through its savings-and-loan bailout bill, the

American people got a good taste of how legislators can sneak in their own proposals with almost no attention. For tacked on to the S&L bill was an amendment that would change the way bank loans are made by emphasizing racial and other non-economic criteria. These and similar amendments are likely to be dropped in the final compromise bill, but they are also being considered separately and are likely to pass in some form eventually. As if the nation did not already have enough problems in its lending industry, Congress seems determined to give it some more.

Congress first started scrambling on the discrimination-in-lending issue after the Atlanta Journal-Constitution carried a Pulitzer Prize-winning series on it. To be sure, minority applicants are less likely to qualify for home loans, because they are less likely to have the requisite income. But the housing activists are arguing that this result means the financial community is guilty of racial discrimination. The lending institutions thus find themselves on the defensive, ready to make concessions to avoid continued accusations from Congress and the press.

The attention all this has received puts the spotlight on Representative Joseph P. Kennedy II, the two-term congressman from Boston who authored the proposals. Sniffing out "discriminatory lending practices" has been one of Kennedy's top legislative priorities since he first came to Congress in 1987. According to Representative Steve Bartlett (R., Tex.), Representative Kennedy "has adopted in totaland in essence makes his legislative life pushing-the much more . . . leftwing consumer groups' agenda." His devotion to their causes has made Mr. Kennedy's voting record one of the most liberal in the House.

One such proposal would require lenders to break down their mortgage applications and rejections according to the race, gender, and income level of the applicants and to make the information publicly available. Another would make public the confidential ratings bank regulators give financial institutions on how well they are meeting the credit needs of their communities. Even forgetting for a moment that the original goal of the civilrights movement was precisely to eliminate such criteria from decisions, the Kennedy bids obviously have another, more political use. As Representative Stephen L. Neal (D., N.C.) puts it, activists use such laws "to blackmail banks into doing things that simply do not make good business sense."

On a recent appearance on the Phil Donahue Show, Representative Kennedy gave a glimpse of how the figures can be used. "If you're white in America," he said, "you're three times as likely to be able to get a loan than [sic] if you're black." Of course he didn't feel it necessary to note that if you're white you're three times less likely to get a home-improvement loan than if you're black. Of course not-because that would confirm bankers' arguments that the outcome is owing to economics rather than prejudice.

"Folks," Mr. Kennedy confided in the Donahue audience, "the way it works in Washington is that you're left in the dark," a practice the congressman was himself engaging in at the moment. For when the same issue came up before the House Banking Committee, he conceded that the seeming appearance of racial discrimination in the making of mortgage loans could be due to the underwriting standards that the quasi-governmental secondarymarket agencies, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (Fannie Mae and Freddie Mae), have set for lenders. But this was a point the congressman failed to add to his inflammatory remarks on TV.

As with most such legislation the point here is simply to force the private sector to pay for failed liberal programs. In this case the likely outcome would be to intimidate lenders into practicing reverse discrimination when making loans. For example, legislative director Donald R. Carlson says the goal is to get lenders to subsidize down-payments and mortgageinterest payments for minorities.

Indeed, if his other priorities are any indication, young Joe Kennedy is still stuck on the old solutions: obtaining federal matching grants for non-profit organizations to create lowincome housing, directing the Environmental Protection Agency to develop technology to improve indoor air quality, expanding veterans' health benefits. The new proposals to emphasize racial and other criteria in mortgage lending are considered to be his most significant to date.

However, his fellow House Democrats may have a better reading on Representative Kennedy than the rest of us. As with Uncle Ted, young Joe Kennedy hasn't been given any real position of leadership by his own party. It has twice denied him membership on important committees that would have allowed him to be more of a player in Congress-first on the Appropriations Committee; then on Energy and Commerce. In last year's vice-presidential debate, Lloyd Bentsen demolished Dan Quayle with the biting remark: "You're no Jack Kennedy." Today the Democrats seem to be saying much the same thing to young Joe.

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