Menendez, Booker, Colleagues Introduce Legislation to Help Prevent Housing Discrimination

Menendez, Booker, Colleagues Introduce Legislation to Help Prevent Housing Discrimination

Women and people of color still face lending discrimination Bill would allow regulators and advocates to hold banks accountable for discriminatory or unfair lending practices

   

WASHINGTON, D.C. – U.S. Senators Bob Menendez, a senior member of the Senate Banking Committee, and Cory Booker today joined a group of their colleagues in introducing legislation that would require loan quality criteria be made publically available by any lender issuing a significant number of mortgages and home equity lines of credit each year. The Home Loan Quality Transparency Act would reinstate Dodd-Frank Wall Street Reform and Consumer Protection Act reporting requirements that were repealed last year.

“The financial crisis revealed what we knew to be true for decades - that banks and mortgage lenders targeted communities of color to sell the riskiest and highest-cost mortgage products, and we worked hard to hold banks accountable for these practices in the aftermath,” said Sen. Menendez. “Unfortunately, Congress reversed course on this critical progress last year, effectively turning a blind eye to continued discrimination in mortgage lending.  Our bill puts us back on the right path, and helps ensure fair lending for all so every American—no matter what zip code they live in, the color of their skin, or their gender—can buy a home with a fair and affordable mortgage.”

“Many Americans are still feeling the pain of the financial crisis, particularly communities of color who were callously targeted by predatory lenders,” said Sen. Booker. “We should be holding banks more accountable—not less—for discriminatory practices in the housing market. This legislation takes steps to help fight these injustices and ensure everyone has equal access to the American Dream.”

Last year, Congress voted to roll back reform measures passed under the Dodd-Frank Wall Street Reform and Consumer Protection Act, exempting 85% of all banks and credit unions from reporting loan characteristics vital to ensuring lending fairness. Despite research showing that racial minorities and women still face loan discrimination, the new law raised the reporting requirement exemption for lenders from 25 to 500 mortgages and from 100 to 500 home equity loans made per year. 

The Home Loan Quality Transparency Act would reinstate the requirement that any bank or credit union that makes more than 25 mortgage loans a year or 100 home equity lines of credit report detailed loan characteristics such as interest rates, points and fees, loan terms as well as borrower characteristics like credit score and ethnicity. It also requires each loan receive a unique loan identifier to track the loan if it is sold to an investor. Fair housing experts warn that without this data, finding and prosecuting institutions for discriminatory lending practices is almost impossible.

U.S. Senators Catherine Cortez Masto (D-Nev.), Richard J. Durbin (D-Ill.), Maria Cantwell (D-Wash.), Tammy Duckworth (D-Ill.), Dianne Feinstein (D-Calif), Kristen Gillibrand (D-N.Y.), Kamala Harris (D-Calif.), Tina Smith (D-Minn.), Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.) joined Sens. Menendez and Booker in introducing the bill.