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City Commission Sees Flaws In Lending Study
Some of that insight was provided by Kevin Kabat, president of Fifth Third Bank, Western Michigan.
In response to the study Kabat sent a letter to Mayor John Logie outlining the initiatives his bank has undertaken to promote access to affordable housing in Grand Rapids.
He described Fifth Third’s commitment to the community and to servicing all areas of the city, including low- to moderate-income areas, and expressed the bank’s willingness to work with the city in addressing such issues as affordable housing and credit.
Kabat also pointed out weaknesses in the study’s methodology, as well as the data used in compiling the report.
The study has been criticized because it’s based on 12-year-old data and because it’s not specific to Grand Rapids, among other things.
Logie said he would be interested in hearing from Fifth Third and other Grand Rapids lenders as to whether there may be some way more information could be made available — while still maintaining individuals’ privacy — to help the city analyze the issue of creditworthiness as well as other issues raised in the report.
“I’m interested as a policy maker, and I suspect I can speak for all of us, in getting good information on which to base good, hard evidence. So I want to kind of challenge the banks.”
Second Ward Commissioner Lynn Rabaut said, “To have the banks come forward with the information to help clarify and help fine tune this for us is greatly appreciated and I hope others follow suit.”
Third Ward Commissioner Robert Dean said he was greatly disappointed that only Fifth Third responded to the study. No other bank said anything in response “so it’s almost like through the acquiescence of others, it’s almost like pleading guilty,” he said.
“I would hope that other institutions would step forward and say, ‘Hey, there is a problem or has been a problem; discrimination is real, but let’s work to minimize what has been done in the past.’”
Commissioner Roy Schmidt of the city’s 1st Ward disagreed with Dean that the lack of response from other banks was an indication of guilt and said he didn’t want to put the other banks on trial.
He recommended giving other banks a chance to review the report and talk about what initiatives their institutions have taken to address the potential of racial discrimination in mortgage lending.
Commissioners voted Tuesday to implement the recommendations in the study.