FOR IMMEDIATE RELEASE                                          CR
WEDNESDAY, AUGUST 13, 1997                         (202) 616-2777
                                               TDD (202) 514-1888

                                 
  ALBANK TO MAKE $55 MILLION IN DISCOUNTED LOANS FOR ALLEGEDLY
   ENGAGING IN REDLINING, UNDER JUSTICE DEPARTMENT SETTLEMENT
                                
                                
     WASHINGTON, D.C. - A New York bank that allegedly "redlined"
communities within Connecticut and Westchester County, New York,
will no longer refuse to make home mortgage loans to residents
there and will provide $55 million in discounted loans, under an
agreement reached today with the Justice Department.

     The agreement, filed today with a complaint in U.S. District
Court in Albany, New York, resolves allegations that Albank
Financial Corporation and Albank FSB violated the Fair Housing
Act and the Equal Credit Opportunity Act.  The complaint alleged
that the bank placed restrictions on mortgages in areas with
significant minority populations in Westchester County and seven
Connecticut cities.  

     Under the agreement, Albank will implement a nondiscrim-
inatory lending policy and will establish a special lending and
marketing program for the excluded communities. 
 
     "Qualified residents of minority communities should have the
same chance as anyone else to obtain a home mortgage," said
Attorney General Janet Reno.  "Today's settlement will help
ensure that residents of the redlined areas will have a chance to
obtain credit.  We commend Albank for moving promptly to resolve
this matter in a way that will provide new home ownership
opportunities for so many people."

     Albank, a $3.5 billion thrift institution headquartered in
Albany, conducts business in New England, New York, and parts of
the Midwest.  More than half of its mortgage lending is conducted
through "correspondents."  These are generally mortgage bankers
or other brokers who evaluate loans based on underwriting
guidelines set forth by Albank, which then provides the funding
for the loan.  All of the bank's mortgage lending in Connecticut
and Westchester County, New York is done in this manner.

     According to the Department's complaint, in the late 1980's
and early 1990's, Albank instructed correspondents, both orally
and in writing, not to lend in certain areas.  All of these areas
have substantial minority populations.  Included in the ban were
areas south of I-287 in Westchester County and the Connecticut
cities of Hartford, Waterbury, Bridgeport, New Haven, New
Britain, Stamford and Norwalk.

     The Department alleged that Albank deliberately carved out
heavily minority enclaves from its business area, without any
sound business justification for doing so.  When exceptions were
made in these areas, according to the complaint, virtually all
were for loans to non-minorities.  Albank denies the charges, but
has agreed to resolve the case through a settlement.

     As a result of Albank's geographic restrictions, from 1992
through 1996, in the Connecticut areas outside the excluded seven
cities Albank took 550 applications from whites, six from African
Americans, and three from Hispanics. During that same period, in
Westchester County, Albank took a total of 203 loan applications,
only seven of which were from African American and Hispanic
applicants.
   
     "We are not telling banks where to do business, or that they
cannot use economic factors to decide where and how to market
loans," stated Isabelle Katz Pinzler, Acting Assistant Attorney
General for Civil Rights.  "But loan marketing decisions should
be based on credit risk and other legitimate business
considerations, and not on the racial or ethnic makeup of a
community."

     Under the agreement, Albank will:
*    make at least $55 million in mortgage loans at 1.5
     percentage points below the prevailing interest rate to many
     areas that it redlined;

*    conduct targeted advertising and public information
     campaigns on mortgage loan opportunities;

*    contribute at least $700,000 to a home ownership counseling
     program, to be divided equally between a company-run program
     and local community group programs; 

*    provide fair lending education for employees; and,

*    take steps to ensure that brokers with whom it does business
     comply with fair lending laws.

     The below-market lending, coupled with the cash
contributions to local community groups, will cost Albank nearly
$9 million.
  
     The Justice Department's action followed a referral from the
Office of Thrift Supervision, which conducted a review of
Albank's marketing practices earlier this year.  The OTS findings
led both to a Justice Department investigation as well as a
separate agreement between Albank and the New York State Banking
Department (NYSBD) regarding Westchester County only.  Some terms
of the separate agreement have been incorporated into the Justice
Department settlement. 

     "We are committed to working with state and federal
regulators to root out lending discrimination," said Reno.  "The
assistance provided by OTS and the NYSBD was instrumental in
today's agreement."
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