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A leading credit information service is offering lenders a way to gauge loan risk by considering where borrowers live as well as how promptly they pay their bills, an approach that raises red flags for consumer groups.

Equifax Inc. said its "Bankruptcy Navigator" system, introduced Wednesday, will give banks and other lenders one more tool to determine if they should charge higher interest, offer preapproved credit cards, adjust lending limits, or extend credit at all in areas with low ratings.

"Why should my credit depend on whether my neighbor pays his bills?" asked Janice Shields, consumer research director for the U.S. Public Interest Research Group. "If the formula is wrong, then people are going to be denied credit who should get it, or people are going to be paying higher rates than they should be," she said.

Equifax said it has no intention of discriminating against borrowers. It said the purpose of Bankruptcy Navigator is to help lenders find good credit risks in areas that may have a slumping economy.

Minority mortgages on the upswing

WASHINGTON (AP) -- Home loans to minorities increased three times faster than total mortgage lending over the past two years, the government reported Wednesday.

The Comptroller of the Currency, which regulates national banks, said mortgage lending to minority customers was up 33.3 percent in 1995, compared with levels in 1993. Overall mortgage lending during the period rose just 9.67 percent.

UDC-backed bonds are sold

ALBANY (AP) -- For the first time since its near-default helped precipitate New York's financial crisis in the mid-1970s, the state Urban Development Corp. went to Wall Street Wednesday to sell bonds without using taxpayers as a crutch.

The agency sold $596 million worth of bonds to restructure existing debt. Instead of being backed by the credit of the state, as all other bond offerings by the agency have been for the past two decades, the UDC is securing the bonds by a first lien on 109 housing projects it owns and on federal interest subsidies on those properties.

The UDC made the offering in two pieces of $451 million and $145 million. The larger of the bond offerings received a rating of "AAA" from Standard & Poor's, Moody's and Fitch Investors, a higher rating than the state itself has.

U.S. sets refunding schedule

WASHINGTON (AP) -- The Treasury Department said Wednesday it plans to borrow $38.5 billion at its quarterly refunding next week to pay off maturing securities and replenish its coffers.

It will sell $18.5 billion in three-year notes on Nov. 5, $10 billion in 10-year notes on Nov. 6 and $10 billion in 30-year bonds on Nov. 7.

Minimum purchase amounts will be $5,000 for the three-year notes and $1,000 for both the 10-year notes and 30-year bonds.

In addition, the Treasury will sell $13 billion in 34-day cash management bills on Nov. 13.

Rail unions to probe Conrail bids

WASHINGTON (Reuters) -- Unions representing about 70,000 workers at Conrail and its two suitors said Wednesday they had agreed to jointly analyze the competing rail merger proposals and emerge with a unified position.

The unprecedented stance taken by a dozen rail unions, the AFL-CIO and its Transportation Trades Department serves notice on Conrail, CSX Corp., Norfolk Southern Corp. and investors that labor intends to take an active and unified role in the unfolding merger drama.

In other business news

Texaco Inc. announced a sweeping reorganization that will consolidate the company's oil production headquarters in Houston and base its refining and marketing business in New York. It also said chief financial officer, William Bousquette, 60, would retire at the end of the year and be replaced by the head of the European operation.

Nestle Chocolate and Confections will lay off about 140 hourly workers here over the next two months because of the opening of an automated confections facility at the plant. Between 80 and 90 of the layoffs are permanent.

Tandy Corp.'s efforts to revive Computer City suffered another blow Wednesday with the departure of Matthew Howard, the unit's second president since February. Analysts say Tandy could sell as many as 40 stores in the 100-unit chain to archrival CompUSA.

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