NEWS STAND: Google Threatens to Exit China, Justice Focuses on Lending Bias

Our take on today's headlines.

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drummond
Drummond of Google - Getty Images

GOOGLE THREATENS TO EXIT CHINA

Google says it may pull out of China after discovering attempts to hack into its accounts that may be linked to the Chinese government. The search company reported that "a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists." Officials say the attack on Google is part of a  much larger campaign of corporate and political espionage aimed at major financial, defense, technology and research organizations in the United States, according to the Washington Post.

Congressional sources said efforts were made to penetrate the accounts of as many as 34 large companies, including Adobe, Dow Chemical, Northup Grumman, Symantec and Yahoo. "The recent cyber-intrusion that Google attributes to China is troubling, and the federal government is looking into it," White House spokesman Nick Shapiro said. He added that President Obama made Internet freedom "a central human rights issue" on his trip to China last fall.

David Drummond, Google's senior VP and chief legal officer, (photo) said his company was reviewing the feasibility of its Chinese operations. "We recognize that this may well mean having to shut down Google.cn, and potentially, our offices in China." Drummond said the company will no longer censor search results  on Google's Chinese sites and will soon discuss with the Chinese government how it may "run a unfiltered search engine within the law, if at all."

There's a lot of cynicism about Google's sudden realization that censorship is wrong. Writes Evgeny Morozon on his blog in Foreign Policy :  "Now, if you believe that Google was wrong to censor the Web in China in the first place, I doubt you'll suddenly become a fan of their work -- they still don't seem to recognize that censoring the Web in China may have been wrong for ethical reasons and frame it simply as a business decision (based on new security threats).  You'll probably think that they are now doing the right thing for the wrong reasons."

JUSTICE FOCUSES ON LENDING BIAS

The U.S. Justice Department is taking a closer look at discrimination in lending. The agency will be scrutinizing the practices of banks and mortgage lenders and their interactions with minority borrowers, says the New York Times.

The department's head of civil rights, Tom Perez is scheduled to announce the new initiative at Jesse Jackson's "Wall Street Project" conference in New York. Perez is casting the new initiative as a turnaround for a department that failed to examine lending practices during the real estate boom.

In the past, lending discrimination cases primarily focused on "redlining" - a bank's refusal to lend to qualified borrowers in minority areas - the new push will instead center on a more recent phenomenon critics have called "reverse redlining," the paper explained.

 In reverse redlining, a mortgage brokerage or bank systematically singles out minority neighborhoods for loans with inferior terms like high up-front fees, high interest rates and lax underwriting practices. Because the original lender would typically resell such a loan after collecting its fees, it did not care about the risk of foreclosure.