LOS ANGELES -- LOS ANGELES -- A data service that gives lending institutions a breakdown of loan delinquencies on the basis of ZIP code areas could put some lenders in jeopardy of breaking state and federal law, authorities say.

Lenders say the Infocredit service by Wharton Economics of Philadelphia can help them seek out new business. But some government and private officials say it could be used for "redlining" -- the illegal practice of using geographic areas to make decisions on whether to lend money to residents and buyers in a specific community.

"I can't fault a bank for wanting to get this information," said Robert Mulford, vice president and general counsel of the Federal Reserve Bank of San Francisco. "But refusing to give loans to particular areas because of current delinquency rates would be a potential violation."

Wharton provides the total of consumers' loans outstanding each quarter, the number of accounts and the nonpayment rate of loans in various ZIP code areas. Wharton says it draws its statistics from TRW Inc.'s more than 130 million consumer credit profiles.

California law prohibits using the location of a home "in whole or in part" in making mortgage loan decisions unless the lender can show the discrimination was necessary to avoid an "unsafe and unsound business practice."

Martha Gravlee, spokeswoman for the Federal Home Loan Bank Board, which regulates the nation's federal savings and loan associations, said, "The location of a house cannot be a factor at all in a lending decision."

Lenders also may encounter trouble with nonmortgage lending if any discrimination disproportionately affects minorities, the Los Angeles Herald Examiner reported this week.

"Conceivably there could be a {legitimate} business purpose" for the data service, said John Hetland, a University of California professor of real estate finance law. "But I wouldn't want to be the lender trying to defend it . . . . I'd be very leery about even buying it if I were a lender."

First Interstate Bank of California acknowledged that it had signed up, even though the bank had not decided exactly how to use the product. New York's Citibank says its credit card operation -- the nation's largest -- has considered buying the product.

Wharton declined to disclose client names but said additional customers included major East Coast financial institutions.

Wharton said it sells Infocredit for several legitimate uses: As a screening device in direct marketing campaigns that solicit loan applications, a tool for retailers in locating new stores or as a way for banks to identify acquisition targets.