Getting a fair deal: House bill calls for greater disclosure of lending to small and minority businesses.

There's an old truism: "You can't borrow money, unless you can prove you don't need it." No one seems to know this better than minority business owners. Despite charges of biased practices, lenders still argue that they are making loans to minority-owned businesses. Now they are being asked to prove it.

Rep. Albert R. Wynn (D-Md.) has introduced a bill, the Small Business Lending Disclosure Act of 1993 (H.R. 918), which would require banks to disclose records of lending to minorityowned and start-up small businesses.

Sound familiar? The Home Mortgage Disclosure Act (HMDA) requires the same thing for banks in mortgage lending. Public disclosure of 1990 and 1991 HMDA numbers revealed that black mortgage applicants were rejected twice as often as their white counterparts.

Lending patterns in the business community may prove just as jolting should H.R. 918 come to pass. "The banking community talks a great deal about being interested in making loans to minorities," says Wynn. "But there is no basis for analyzing their performance."

This bill is long overdue, says Karriem Holman, executive assistant of the National Black Business Council (NBBC) Inc., in Silver Spring, Md., a national lobbying group comprised of black business owners and professionals. Black entrepreneurs have long believed mainstream banks were apprehensive and sometimes secretive about their lending practices, adds Holman.

H.R. 918 is currently in the Committee on Banking, Finance and Urban Affairs, awaiting a hearing date. Wynn is trying to persuade the Comptroller of the Currency, Eugene Ludwig, to include the bill as part of the Community Reinvestment Act of 1977, which requires banks and thrifts to meet the credit needs of the communities they serve.

Wynn says such a move would give the Small Business Lending Disclosure Act greater pull. "It would enable us to get a much better handle on what's happening in the banking community in relation to black businesses."

While Wynn has gotten a great deal of support from small minority businesses in his district, few black organizations seem to know of the bill's existence. Then again, the banking community's leading advocate, the American Bankers Association, has little knowledge of the bill.

Instead of standing by and hoping the bill gets passed, black entrepreneurs should aggressively write their representatives in Congress, says Holman. They also have the option of putting their John Hancock on the bill. In addition to making others aware of the bill, the NBBC is calling on minority businesses to articulate those areas H.R. 918 may have overlooked.

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