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1st National says it is not target in racial-bias probe Bank calls figures in report misleading


First National Bank of Maryland, included in a published list of 117 banks with mortgage lending disparities based on race, said yesterday that it is not a subject of investigation by federal regulators probing the issue of racial bias in lending.

The list, printed Tuesday in the Wall Street Journal, included banks whose rejection rate for black and Hispanic mortgage applicants was more than twice that for whites in 1990. The Journal compiled the list from data made public under the 1989 Home Mortgage Disclosure Act.

The comptroller of the currency had said that it sent letters of inquiry last month to 266 unidentified banks that rejected minorities for mortgage loans twice as often as they rejected whites.

"We have not received a letter or any other communication from the Office of the Comptroller of the Currency indicating that we have been targeted for investigation of lending practices," said Ronald McGuirk, a spokesman for First Maryland Bancorp, parent of First National Bank of Maryland. First National, the second-largest bank in the state, was the only Maryland-based bank on the Journal list.

A spokeswoman for the comptroller's office said earlier this week that for several reasons the Journal's list was different from the list of banks that received letters of inquiry.

"We're very concerned that the fact that a bank has been identified . . . means that we think that they are discriminating," said Lee Cross, a spokeswoman for the comptroller of the currency. That might not be the case for many banks, she said.

For example, she said, the published list was based on data thatdidn't include home equity loans, which the comptroller's office included in its analysis.

Also, several banks on the Journal list, including First National, said they appeared on the list because of disparities that stemmed from the banks' aggressive efforts to lend to minorities. Those programs led to a disproportionately higher number of loan rejections involving minorities.

"We attribute these large numbers of black rejections to the fact that we made a very pro-active effort to market residential mortgage loans to minorities and other low-income people, particularly in Baltimore City," Mr. McGuirk said.

In 1990, First National processed 331 mortgage applications from blacks in the Baltimore area, Mr. McGuirk said. Seventy-two, 18.9 percent of the total, were rejected. Of the 2,689 white applicants that year, 126, or 4.7 percent, were rejected.

"We have reviewed every one of those rejections and found that every one of them was satisfactorily handled and should have been rejected," Mr. McGuirk said.

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