Edward D. Irons must have known he would anger the gods of banking when his office issued a study recently purporting to analyze mortgage lending practices at six D.C. banks.
Irons, who is superintendent of the District's Office of Banking and Financial Institutions, nevertheless released the study last week, saying only that the information speaks for itself. It does that, all right, though its simplicity raises more questions than it answers.
In any case, Irons may have succeeded in forcing the banks in question to disclose more information about their overall investments in the District. All six banks were acquired in interstate mergers by Maryland and Virginia holding companies, beginning in 1986. In exchange for permission to acquire those banks, the holding companies agreed to make several types of investments in under-served communities.
Smarting from Irons's study on mortgage lending, representatives of the six banks in question have promised to discredit the superintendent by providing comprehensive reports of their investment activities.
The study that so offended bank officials actually falls short of assessing their total investment in the city, but it raises doubts about their commitment. Only 6 percent of the $955 million in mortgage loans made by the banks between 1987 and 1989 went to under-served neighborhoods, according to the study. In the absence of any explanation for the disparity, one can only speculate about what it all means.
Whether by design or by serendipity, Irons now appears to be closer to getting what District officials have sought from the six banks for at least a year now. Indeed, Robert Pincus, president of Sovran/D.C. National Bank, promised to "take away credibility" from Irons by disclosing information about that institution's investment activity in District neighborhoods.
If anything, Pincus and other bankers involved would be establishing credibility for themselves by going beyond Irons's limited study. When asked by District officials last year for information about their investments in the city, the same banks declined, citing the difficulty of compiling the data. Nonetheless, the chairman of a key D.C. Council committee criticized Irons then for his inability to pry the information out of the banks.
By releasing the recent study on mortgage lending, Irons not only incurred the wrath of bankers but again was sharply criticized by Charlene Drew Jarvis, who chairs the council's committee on housing and economic development. De'ja` vu.
By now, Irons should be accustomed to that. Most of his tenure as superintendent has been spent responding to criticism from Jarvis and members of the city's banking industry. The only thing that's new in this ongoing power struggle is the study on mortgage lending.
As it is, the report is fairly narrow in scope, showing only a breakdown of mortgage loans by neighborhood. Clearly, however, it is identified as a study of mortgage activity and is based, we are told, on information obtained from a number of sources, including the office of the recorder of deeds.
Although called an analysis by Irons, the document shows only that the banks in question made few mortgage loans in under-served areas of the District in a two-year period. A statement accompanying the report concedes that the data "is insufficient to definitely prove that banks are allocating mortgage loans according to race or economics."
Nonetheless, the distribution of loans follows patterns shown in prior studies of mortgage lending in other cities that "conclude that redlining is the basis of credit allocation as described in this analysis," the statement said.
The raw data in this instance cannot be accepted on its face as redlining, of course. The report is devoid of anything that shows, for example, how many mortgage loan applications originated in under-served communities. Nor is it possible to tell from reading the report how many applicants were turned down because of race or Zip code.
In other words, there isn't much to go, on other than assumptions, in the absence of formal complaints by individuals who feel they may have been victims of discrimination.
Meanwhile, Jarvis has a point when she says the superintendent's report doesn't accurately portray the banks' overall loan activity. Of course the study doesn't portray the banks' overall lending activity. Irons made that abundantly clear. It is the only information that's readily available from public records. Whether he should have presented part of the picture and not the whole in this case is open to debate.
The issue is whether the information in the report accurately reflects the mortgage lending activity of the banks involved. Perhaps the banks will clarify the numbers when they present their rebuttal.
In the meantime, Maurice Cullinane, executive director of the Washington Area Bankers Association, contends Irons's report is "totally off-target and full of misinformation."
Is it really? What does Cullinane know that he isn't telling us?
The banks can clear up the confusion easily enough by providing Jarvis's committee, if not Irons, with documents showing the number and dollar amounts of mortgage loans they made in the District between 1987 and 1989.
Only by documenting their mortgage lending activity and other investments in so-called under-served areas of the city will they prove that Irons is totally off target and that his study of mortgage lending activity is full of misinformation.
As it is now, the onus is on the banks.