Fed sifts for evidence of unfair loan rates

The Federal Reserve is examining home loans to see if minorities are charged higher interest rates because of discrimination, Fed Chairman Alan Greenspan said earlier this month.

“The adoption of risk-based pricing, together with elements of discretion that are often afforded loan officers or brokers in the pricing of credits, does raise the concern that some borrowers, in fact, may not be treated fairly,” Greenspan said in a speech to the Independent Community Bankers of America. The loans carry higher interest rates.

“If screening suggests that there might be a fairness issue, additional information will need to be collected from banks’ loan files or other sources,” he said.