Washington – Senators Dianne Feinstein (D-Calif.), Catherine Cortez Masto (D-Nev.), Richard J. Durbin (D-Ill.), Cory Booker (D-N.J.), Maria Cantwell (D-Wash.), Tammy Duckworth (D-Ill.), Kristen Gillibrand (D-N.Y.), Kamala D. Harris (D-Calif.), Robert Menendez (D-N.J.), Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.) introduced The Home Loan Quality Transparency Act to reinstate Dodd Frank Wall Street Reform and Consumer Protection Act reporting requirements repealed last year. This legislation would restore the requirement that loan quality criteria is made publically available by any lender issuing a significant number of mortgages and home equity lines of credit each year. This bill gives regulators and advocates the information they need to hold banks accountable for discriminatory or unfair lending practices. Congresswoman Nydia M. Velázquez, Chairwoman of the House Small Business Committee, has introduced its companion bill (H.R. 963) in the House of Representatives.
“In 2010 during the housing crisis, more than 10 percent of California homes were foreclosed on,” said Senator Feinstein. “Minority borrowers were even worse off because they disproportionately received riskier, more expensive loans. Unfortunately, Congress last year rolled back measures aimed at addressing loan discrimination. I’m proud to support the Home Loan Quality Transparency Act that will restore those vital consumer safety measures.”
“When the foreclosure crisis hit Nevada in 2008, homeowners of color were hit especially hard. Years of unchecked mortgage lending discrimination had left them victim to predatory lenders selling high-cost, low quality mortgages. As a result, many hardworking Nevadans became unable to stay in their homes,” said Senator Cortez Masto. “Last year Congress voted to make it harder to find and hold banks and credit unions who discriminate accountable for their actions. That’s why I’m proud to introduce legislation requiring banks and credit unions to report data on their borrowers and the quality of their loans to ensure that the public and federal regulators have access to the information they need to hold banks accountable. Nevadans cannot afford to let banks continue to write their own rules and create another crisis that devastates our economy.”
“Women and people of color face tougher roads to home ownership and obtaining mortgage loans across the country. And yet last year, Congress voted to roll back Dodd-Frank consumer protections that held lenders accountable for discriminatory mortgage and lending practices,” said Senator Durbin. “This bill will help protect Illinoisans by reinstating protections that increase transparency in lending practices, and help ensure every American – regardless of race, gender, or ethnicity – is given fair access to home mortgage loans.”
“Many Americans are still feeling the pain of the financial crisis, particularly communities of color who were callously targeted by predatory lenders,” said Senator 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.”
“No one should have to worry about being denied a home loan due to their race, ethnicity, age, or zip code,” said Senator Cantwell. “Transparency is key to holding banks accountable if they are engaged in unfair practices.”
“People of color still face discrimination in the housing market and are more likely to be steered towards predatory products and more expensive loans when they try to buy a home and achieve their part of the American Dream. That’s unacceptable,” said Senator Duckworth. “We need to restore these critical protections against racial discrimination, which is why I’m proud to join Senators Cortez Masto, Booker and Warren in introducing this legislation to hold discriminatory lenders accountable while identifying those institutions that play by the rules.”
“It is unacceptable that so many men and women of color continue to experience discrimination when they take out loans to buy a house,” said Senator Gillibrand. “Congress needs to do much more to end the systemic racism in our financial institutions, and I am proud to introduce this urgently needed legislation to restore an important anti-discrimination provision into law that Congress irresponsibly repealed just a couple of years ago. I urge my colleagues to join me in supporting this bill to help stop predatory lenders from targeting minority communities with bad mortgages, and I will continue to do everything in my power to fight back against all forms of discrimination.”
“Right now, all across this country Americans who want to buy a home are unable to find a decent place to live at a reasonable price,” said Senator Harris. “We are experiencing a housing crisis, and the uncomfortable truth is that women and people of color face additional barriers to homeownership because of decades of discrimination by lenders. We need to level the playing field. We can start by re-establishing rules requiring banks to be transparent about loan quality criteria and setting up a system to ensure we are properly equipped to find discriminatory lending practices.”
“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 Senator 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.”
“I believe that when we have an opportunity to make our communities more inclusive, strengthen transparency, and make sure banks and lenders are playing by the rules, we should take it,” said Senator Smith. “This legislation strengthens a key tool for community planning, combatting discriminatory practices, and is another step in doing what is right for our economy and for communities in Minnesota and across the country.”
“There should be no room for discrimination anywhere in our country, including in mortgage lending. But last year, Congress made it easier for banks to hide their information and harder to ensure that everyone has a fair shot when applying for a loan – we cannot allow that to stand,” said Senator Van Hollen. “I’m proud to support this legislation, which will help ensure people of color, women, and all Americans have the right to pursue the dream of owning a home.”
“All across the country, people of color are offered fewer mortgages at worse rates than similar white borrowers,” said Senator Warren. “I’m proud to cosponsor this bill with Senator Cortez Masto to restore the tools we need to aggressively fight mortgage discrimination and ensure that families aren’t prevented from building home equity and wealth because of the color of their skin.”
“Oregon homeowners were hit hard by the 2008 financial collapse, and over a decade later folks are still working to piece their lives back together,” said Senator Wyden. “It’s imperative that the government protect Americans from unfair, discriminatory home loan practices, especially those that leave already vulnerable families open to the same predatory tactics we know lead to economic ruin.”
“The first step in solving any problem is having accurate information and data,” said Rep. Velázquez (D-N.Y.) “Our legislation would require banks to report accurately on to whom they are making mortgage loans and what those loans look like. Regrettably, last year, Congress made it easier for financial institutions to discriminate in the housing market by easing these reporting rules. By reinstating some basic transparency requirements, our bill will prevent financial discrimination in the home loan market. I’m proud to join Senator Cortez Masto in this effort.”
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, women and some rural residents 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.
Senator Cortez Masto’s legislation will strengthen protections against housing discrimination. Her bill will reinstate the requirement under the Dodd-Frank Wall Street Reform and Consumer Protection Act 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.