The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5449 March 2, 1979 BANKS AND BANKING: Participation in State Housing Development Authority lending program MORTGAGES: Loans made pursuant to a State Housing Development Authority program CIVIL RIGHTS: Anti-redlining statute STATE HOUSING DEVELOPMENT AUTHORITY: Compliance with antiredlining statute A credit institution may participate in a program sponsored by the State Housing Development Authority favoring certain persons or geographic areas without violating 1977 PA 135, which prohibits the practice of 'redlining' by credit institutions. Hon. Bobby D. Crim Speaker of the House Hon. Joe Conroy State Representative Hon. Mark Clodfelter State Representative House of Representatives The Capitol Lansing, Michigan 48909 You have requested my opinion regarding an interpretation of the mortgage lending practices act (popularly known as the 'anti-redlining law'), 1977 PA 135, MCLA 445.1601 et seq; MSA 23.1125(1) et seq. Under the terms of this act, a bank or other credit institution 'shall not deny a loan application, or vary the interest rate, the term to maturity, the percentage required for a down payment, the application and appraisal procedures, or other terms or conditions of a loan contract' due to racial or ethnic characteristics in a neighborhood, the age of the structure involved, or on the basis of policies or criteria which are not written and uniformly applied within a particular geographic area. 1977 PA 135, supra, Sec. 2(1). Violation of this act may subject a lender to a fine not exceeding $10,000, as well as damages incurred by a prospective borrower. You advise that certain lenders are concerned that participation in a lending program sponsored by the Michigan State Housing Development Authority may violate the anti-redlining statute. The program, created under 1966 PA 346, as amended, MCLA 125.1401 et seq; MSA 16.114(1) et seq, provides financial assistance to persons of low and moderate income for rehabilitation of residential property. 1966 PA 346, as last amended by 1978 PA 192, supra, Sec. 44a. Such assistance takes the form of loans made at rates of interest substantially lower than the rate otherwise offered by commercial lenders. Other terms of the loan may also be more favorable in order to encourage and enable persons of low or moderate income to rehabilitate their homes. In addition, the assistance may be offered in conjunction with a program aimed at rehabilitating particular neighborhoods, which would involve the concentration of assistance to the area affected. 1966 PA 346, as last amended by 1978 PA 192, supra, Sec. 22a(4). Procedurally, such loans are made by banks, savings and loan associations, and other lenders based on criteria established by the Authority. The loans are then assigned to the Authority and the lender continues to service the loans for a fee paid by the Authority. Your question concerns whether lenders participating in the program can be charged with violating the anti-redlining law, specifically when the terms of such loans vary on the basis of geographic or neighborhood locations. The precise question of whether the anti-redlining law may be construed to prohibit government sponsored programs which provide advantageous terms or favor persons in certain areas is resolved by section 4 of the anti-redlining law, 1977 PA 135, supra, Sec. 4, which provides that: 'This act shall not be construed to prohibit the United States, this state, a local governmental entity, an agency or instrumentality of any of the preceding entities, a nonprofit organization, or a credit granting institution acting with the permission of the commissioner, from offering more advantageous loan terms to a person, corporation, partnership, or other entity, or from making advantageous terms available on the basis of location in a specific geographic area when made available under the auspices of an organized housing program operated by the United States, this state, a local governmental entity, an agency or instrumentality of any of the preceding entities, a nonprofit corporation, or a credit granting institution.' The Housing Development Authority Act was devised by the Legislature to assist persons who are themselves frequent victims of redlining policies of certain credit-granting institutions. It would be anomalous to interpret the act so as to prevent them from receiving credit assistance from the Housing Development Authority. Legislative intent is ascertained, not from a particular provision, but from a reading of the entire act and giving effect to all of its provisions. Bidwell v Whitaker, 1 Mich 469 (1850); Collins v Secretary of State, 384 Mich 655; 197 NW2d 423 (1971). Thus, where permission has been granted by the Commissioner, the credit-granting institution is not in violation of 1977 PA 135, supra, even if the State Housing Development Authority does not subsequently purchase the loan. Accordingly, it is my opinion that banks and other credit institutions receiving approval from the Commissioner of the Michigan Financial Institutions Bureau may participate in the program without violating 1977 PA 135, supra. Frank J. Kelley Attorney General