Reading Room Document

Federally Supervised Lending Institutions and Racial Discrimination

This memo considered two questions relating to a proposed executive action that would require several federal agencies to take measures to prevent the consideration of race as a factor in the issuance of home loans by private lending institutions. First, the memo found that neither the FDIC, the Board of Governors of the Federal Reserve System, nor the Comptroller of the Currency had statutory power to take action with respect to institutions already committed to race-discriminatory lending programs. However, there was a basis for these agencies to apply such a program prospectively. Second, the memo found that, where agencies had underlying authority to prevent the consideration of race, the president had the power to direct the FDIC, the Comptroller of the Cur­rency, and the Federal Home Loan Bank Board to take those actions; the president had no similar direct authority over the Board of Governors of the Federal Reserve System.

September 10, 1962