WASHINGTON, D.C. – U.S. Senators Tammy Duckworth (D-IL) and Dick Durbin (D-IL) joined U.S. Senator Catherine Cortez Masto (D-NV) and nine other Senators in helping to introduce legislation to protect potential home-buyers from racial discrimination by reinstating reporting requirements from the Dodd-Frank Wall Street Reform and Consumer Protection Act that were repealed last year. The Home Loan Quality Transparency Act would ensure loan quality criteria is made publically available by any lender issuing a significant number of mortgages and home equity lines of credit each year, giving regulators and advocates the information they need about how potential homebuyers of different races and backgrounds are treated in order to hold banks accountable for discriminatory or unfair lending 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 Duckworth. “We need to restore these critical protections against racial discrimination, which is why I’m proud to join Senators Cortez Masto and Durbin and my colleagues in introducing this legislation to hold discriminatory lenders accountable while identifying those institutions that play by the rules.”
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“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 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.”
Last year, Congress voted to exempt 85% of all banks and credit unions from reporting loan characteristics vital to ensuring lending fairness, something that Duckworth and Durbin opposed. 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. This legislation 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 investors.
The bill is also cosponsored by U.S. Senators Cory Booker (D-NJ), Maria Cantwell (D-WA.), Dianne Feinstein (D-CA), Kristen Gillibrand (D-NY), Kamala D. Harris (D-CA.), Robert Menendez (D-NJ), Tina Smith (D-MN), Elizabeth Warren (D-MA) and Ron Wyden (D-OR).
