The public should know that, so they know where they put their money. It might even gain the good lenders some business. If it's secret, a lender can claim to have a good record when it doesn't. Regulators say releasing the grades would set a precedent for disclosure of more sensitive examination information. And when a bank does poorly, regulators say, they don't have to give bad grades or turn down applications to enforce the law.
Activists scoff at the higher grades for Southern lenders.
Regulators say evidence of disproportionate lending patterns is not enough to cause a bank to be penalized. It's not our job to allocate the credit geographically. The lobbying battle is tied to expectations that Congress this session will probably change the rules on what business a bank can do. A bill approved by the Senate would permit bank holding companies to underwrite and sell mortgage-backed securities, commercial paper, municipal revenue bonds, corporate bonds, mutual funds, and perhaps eventually corporate stock, the most lucrative securities activity. A similar bill is pending in the House.