If reality is, indeed, perception, than discrimination and prejudice are alive and well in the lending process.

According to a national poll of 800 voters, Americans by a five-to-one margin believe banks favor white men over African American and Hispanic males. Moreover, they sense that banks prefer white men by a six-to-one margin over white women.

"Americans recognize that discrimination occurs, not just at the point of approval or denial, but throughout the process," says John Taylor, president of the National Community Reinvestment Coalition, a grassroots organization which sponsored the survey by pollsters Frank Luntz and Jennifer Laszlo.

Of those surveyed, about half believe that if a white man and a black man with equal credit histories and incomes applied for a loan, the white man would be preferred. But among blacks alone, the differential is even more striking. Nine out of ten feel the system will favor the white man. Worse, though equal on paper, not one African American thinks a black man will be favored over the white man.

Similarly, about half those polled said the white man would be approved before an Hispanic with the same credit profile and earnings.

And as far as the gender gap is concerned, women rank far behind men, though blacks apparently not quite as far whites. The respondents said white men are more likely to be approved for a mortgage or small business loan over a white woman with equal credit, 61 percent to 10 percent. But they said black men would be favored over black women, 47 percent to 23 percent. The rest had no opinion.

The NCRC poll also revealed that a flat-out denial is not the only means of discrimination. Rather, about seven out of ten respondents said that higher or different standards for minorities, poorer service, steering to more costly loan products and verbally discouraging minority applications before they even start the loan process were serious problems.

The survey is particularly timely in that it follows the passage of some of the most sweeping banking reform legislation ever. And as far as the NCRC is concerned, it underscores the fact that lawmakers missed an opportune time to modernize the Community Reinvestment Act when they voted to allow banks, securities firms and insurance companies to freely enter into one another's business.

CRA requires banks to serve the credit needs of communities in which they are chartered and from which they take deposits. Since its passage in 1977, it has been the single greatest inducement for lenders to provide loans and access to financial services to low and moderate-income individuals. But the Financial Services Modernization Act, which was signed by President Clinton on Nov. 12, failed to apply CRA to this new class oflenders.

The new law "fails to protect working class and minority communities," says Taylor, whose organization is a trade association representing more than 700 community-based organizations and local public agencies dedicated to increasing the flow of private capital to underserved urban and rural communities.

As Alan Fisher of the California Reinvestment Coalition sees it, the new law is actually a step backwards. "When Native Americans, inner-city minorities or small business owners go to these 'new lenders'," he wants to know, "what will protect them from old-fashioned redlining?"

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