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Despite a 1977 federal law prohibiting banks from discriminating against poorer neighborhoods a practice known as "redlining" the nationwide performance by banks has not been encouraging.

Community leaders complained to Congress this week that bankers still seem more willing to lend money to poor countries, rather than take a chance on poor neighborhoods in America itself.The figures seem to bear them out. As a result of the Community Reinvestment Act of 1977, some $5 billion in loans have been made in poor neighborhoods. In the same time period, $100 billion has been loaned to developing nations.

The law is supposed to block banks with poor records from opening new branches or merging with other institutions. Yet while many low-income areas have not been getting any mortgage loans, about 97 percent of all lenders pass federal reviews with flying colors.

How is this possible?

One flaw may be in the examining process. Examiners may be well trained at judging the financial soundness of a bank, but lack any training in assessing a bank's fair housing record. Unless someone has made a formal complaint, any redlining is usually ignored, consumer groups say.

It may take some toughening of the federal law to make redlining disappear altogether. It would be better if banks could meet their obligations without that prodding.

But at a time when young people are having a hard time buying a house, lending institutions must not discriminate making the American dream of home ownership even more distant for the people who can afford it the least.