Velazquez Reintroduces Bill to Address Discriminatory Housing Lending Practices
Washington, DC – Looking to address housing loan discrimination against racial minorities, women, and certain rural residents, Rep. Nydia M. Velázquez (D-NY) has reintroduced a bill that would increase transparency and accountability in the lending process. The bill, titled the Home Loan Quality Transparency Act of 2021, would require lending institutions and credit unions to provide public disclosures regarding their mortgages and home equity lines of credit. This new requirement for reporting would increase transparency among these institutions and help to find and eliminate discriminatory lending practices.
“Today’s housing market is built on a bedrock of discriminatory practices, with systemic issues dictating who can and cannot have fair access to a home,” said Velázquez. “Even decades after Congress passed the Home Mortgage Disclosure Act, we still see prejudice leaking into the decision making of lenders nationwide. I’ve authored legislation that would hold all lending institutions in the housing sector to account and ensure families can find the home they need without fear.”
In 2010, Congress expanded the Home Mortgage Disclosure Act’s (HMDA) reporting requirements under the Dodd-Frank Act to target discriminatory lending practices. Under the Act, these lenders were required to compile demographic data regarding their customers as a part of their reports. However, these requirements were rolled back by Congress in 2018 under the Economic Growth, Regulatory Relief, and Consumer Protection Act. This rollback exempted nearly eighty-five percent of all lenders from conducting these reports. The Home Loan Quality Transparency Act of 2021 would reinstate these requirements enacted under Dodd-Frank, and require loans to have a unique loan identifier to trace the loan through sales to investors.
Over forty years ago, Congress passed the Home Mortgage Disclosure Act (HMDA), which required lending institutions to collect and report demographic data on their loans. This data would be used to identify and prosecute discriminatory lending practices. Today, the evidence continues to suggest that racial minorities, women, and some rural residents still face loan discrimination by lenders. According to a report from the Center for Investigative Reporting, redlining practices have extended into the modern day in major cities nationwide. Furthermore, discrimination against women in the housing market is also prevalent, with a 2016 report from the Urban Institute revealing that single women would receive drastically higher interest rates from banks than single males.
The Home Loan Quality Transparency Act of 2021 was introduced alongside its companion bill in the Senate, led by Senator Catherine Cortez Masto (D-NV).
The text of the bill can be found here: