Bill Summary
The "Fair Lending for All Act" aims to enhance enforcement of the Equal Credit Opportunity Act (ECOA) and ensure fair lending practices. Key provisions include:
1. **Establishment of an Office of Fair Lending Testing**: This new office within the Bureau of Consumer Financial Protection will conduct tests to check compliance with the ECOA by creditors, using individuals posing as borrowers to gather data. Any violations discovered will be referred to the Attorney General for further action.
2. **Strengthening Anti-discrimination Measures**: The legislation broadens the scope of prohibited discrimination in credit transactions to include additional factors such as ZIP codes and public assistance income. It also expands the definition of "aggrieved persons" to include anyone who believes they may be harmed by discriminatory practices.
3. **Criminal Penalties for Violations**: The Act introduces criminal penalties for individuals and entities that knowingly violate ECOA provisions, with significant fines and prison time for repeat offenders and corporate executives who direct such violations.
4. **Review of Loan Applications**: The Bureau will review loan application processes to ensure compliance with the ECOA and other federal consumer financial laws, with the authority to prohibit non-compliant practices.
5. **Enhanced Mortgage Data Collection**: The Act mandates that more comprehensive demographic data be collected regarding loan applicants, which will assist in monitoring discrimination in lending practices.
Overall, the Fair Lending for All Act seeks to provide more robust mechanisms for testing compliance, reporting violations, and holding violators accountable, thereby promoting equitable access to credit.
Possible Impacts
The "Fair Lending for All Act" could affect people in several significant ways:
1. **Enhanced Protection Against Discrimination**: By establishing the Office of Fair Lending Testing, the legislation aims to actively monitor and enforce compliance with the Equal Credit Opportunity Act. This means that individuals seeking credit—regardless of their race, gender, age, or income source—will have stronger protections against discriminatory practices. As a result, people who have historically faced barriers in obtaining credit may find it easier to secure loans and mortgages.
2. **Increased Accountability for Creditors**: The bill introduces criminal penalties for individuals and institutions that knowingly engage in discriminatory lending practices. This could deter creditors from violating the law, as they now face potential fines and imprisonment. The increased accountability may lead to fairer lending practices, benefiting consumers who would otherwise be subject to biases in the credit evaluation process.
3. **Access to Legal Recourse for Victims of Discrimination**: The legislation allows individuals and organizations that have been harmed by discriminatory credit practices to seek relief. This means that those who have experienced unfair treatment can take legal action to address grievances, potentially leading to financial restitution or changes in creditor practices. This provision empowers marginalized communities to advocate for their rights and may help rectify systemic inequities in lending.
Overall, the Fair Lending for All Act aims to create a more equitable financial landscape by addressing discrimination in credit transactions and holding violators accountable.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 166 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 166
To establish an Office of Fair Lending Testing to test for compliance
with the Equal Credit Opportunity Act, to strengthen the Equal Credit
Opportunity Act, to ensure that persons injured by discriminatory
practices, including organizations that have diverted resources to
address discrimination and whose mission has been frustrated by illegal
acts, can seek relief under such Act and to provide for criminal
penalties for violating such Act, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 3, 2025
Mr. Green of Texas introduced the following bill; which was referred to
the Committee on Financial Services
_______________________________________________________________________
A BILL
To establish an Office of Fair Lending Testing to test for compliance
with the Equal Credit Opportunity Act, to strengthen the Equal Credit
Opportunity Act, to ensure that persons injured by discriminatory
practices, including organizations that have diverted resources to
address discrimination and whose mission has been frustrated by illegal
acts, can seek relief under such Act and to provide for criminal
penalties for violating such Act, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Lending for All Act''.
SEC. 2. OFFICE OF FAIR LENDING TESTING.
(a) Establishment.--There is established within the Bureau of
Consumer Financial Protection an Office of Fair Lending Testing
(hereinafter referred to as the ``Office'').
(b) Director.--The head of the Office shall be a Director, who
shall--
(1) be appointed to a 5-year term by, and report to, the
Director of the Bureau of Consumer Financial Protection;
(2) appoint and fix the compensation of such employees as
are necessary to carry out the duties of the Office under this
section; and
(3) provide an estimated annual budget to the Director of
the Bureau of Consumer Financial Protection.
(c) Civil Service Position.--The position of the Director shall be
a career position within the civil service.
(d) Testing.--
(1) In general.--The Office, in consultation with the
Attorney General and the Secretary of Housing and Urban
Development, shall conduct testing of compliance with the Equal
Credit Opportunity Act by creditors, through the use of
individuals who, without any bona fide intent to receive a
loan, pose as prospective borrowers for the purpose of
gathering information.
(2) Referral of violations.--If, in carrying out the
testing described under paragraph (1), the Office believes a
person has violated the Equal Credit Opportunity Act, the
Office shall refer such violation in writing to the Attorney
General for appropriate action.
(e) Report to Congress.--Section 707 of the Equal Credit
Opportunity Act (15 U.S.C. 1691f) is amended by adding at the end the
following: ``In addition, each report of the Bureau shall include an
analysis of the testing carried out pursuant to section 2 of the Fair
Lending for All Act, and each report of the Bureau and the Attorney
General shall include a summary of criminal enforcement actions taken
under section 706A.''.
SEC. 3. PROHIBITION ON CREDIT DISCRIMINATION.
(a) In General.--Subsection (a) of section 701 of the Equal Credit
Opportunity Act (15 U.S.C. 1691) is amended to read as follows:
``(a) It shall be unlawful to discriminate against any person, with
respect to any aspect of a credit transaction--
``(1) on the basis of race, color, religion, national
origin, sex (including sexual orientation and gender identity),
marital status, or age (provided the applicant has the capacity
to contract);
``(2) on the basis of the person's ZIP Code, or census
tract;
``(3) because all or part of the person's income derives
from any public assistance program; or
``(4) because the person has in good faith exercised any
right under the Consumer Credit Protection Act.''.
(b) Removal of Certain References to Creditors and Applicants and
Definition Added.--The Equal Credit Opportunity Act (15 U.S.C. 1691 et
seq.) is amended--
(1) in section 701(b)--
(A) by striking ``applicant'' each place such term
appears and inserting ``person''; and
(B) in paragraph (2), by striking ``applicant's''
each place such term appears and inserting
``person's'';
(2) in section 702--
(A) by redesignating subsection (g) as subsection
(h); and
(B) by inserting after subsection (f) the
following:
``(g) The term `aggrieved person' includes any person who--
``(1) claims to have been injured by a discriminatory
credit practice; or
``(2) believes that such person will be injured by a
discriminatory credit practice.'';
(3) in section 704A--
(A) in subsection (b)(1), by striking ``applicant''
each place such term appears and inserting ``aggrieved
person''; and
(B) in subsection (c), by striking ``applicant''
and inserting ``aggrieved person'';
(4) in section 705--
(A) by striking ``the applicant'' each place such
term appears and inserting ``persons''; and
(B) in subsection (a)--
(i) by striking ``a creditor to take'' and
inserting ``taking''; and
(ii) by striking ``applicant'' and
inserting ``person''; and
(5) in section 706--
(A) by striking ``creditor'' each place such term
appears and inserting ``person'';
(B) by striking ``creditor's'' each place such term
appears and inserting ``person's'';
(C) by striking ``creditors'' each place such term
appears and inserting ``persons''; and
(D) in subsection (f), by striking ``applicant''
and inserting ``aggrieved person''.
SEC. 4. CRIMINAL PENALTIES FOR VIOLATIONS OF THE EQUAL CREDIT
OPPORTUNITY ACT.
(a) In General.--The Equal Credit Opportunity Act (15 U.S.C. 1691
et seq.) is amended by inserting after section 706 the following:
``Sec. 706A. Criminal penalties
``(a) Individual Violations.--Any person who knowingly and
willfully violates this title shall be fined not more than $50,000, or
imprisoned not more than 1 year, or both.
``(b) Pattern or Practice.--
``(1) In general.--Any person who engages in a pattern or
practice of knowingly and willfully violating this title shall
be fined not more than $100,000 for each violation of this
title, or imprisoned not more than twenty years, or both.
``(2) Personal liability of executive officers and
directors of the board.--Any executive officer or director of
the board of an entity who knowingly and willfully causes the
entity to engage in a pattern or practice of knowingly and
willfully violating this title (or who directs another agent,
senior officer, or director of the entity to commit such a
violation or engage in such acts that result in the director or
officer being personally unjustly enriched) shall be--
``(A) fined in an amount not to exceed 100 percent
of the compensation (including stock options awarded as
compensation) received by such officer or director from
the entity--
``(i) during the time period in which the
violations occurred; or
``(ii) in the one to three year time period
preceding the date on which the violations were
discovered; and
``(B) imprisoned for not more than 5 years.''.
(b) Clerical Amendment.--The table of contents for the Equal Credit
Opportunity Act (15 U.S.C. 1691 et seq.) is amended by inserting after
the item relating to section 706 the following:
``706A. Criminal penalties.''.
SEC. 5. REVIEW OF LOAN APPLICATIONS.
(a) In General.--Subtitle C of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5531 et seq.) is amended by adding at the end
the following:
``SEC. 1038. REVIEW OF LOAN APPLICATIONS.
``(a) In General.--The Bureau shall carry out reviews of loan
applications and the process of taking loan applications being used by
covered persons to ensure such applications and processes do not
violate the Equal Credit Opportunity Act or any other Federal consumer
financial law.
``(b) Prohibition and Enforcement.--If the Bureau determines under
subsection (a) that any loan application or process of taking a loan
application violates the Equal Credit Opportunity Act or any other
Federal consumer financial law, the Bureau shall--
``(1) prohibit the covered person from using such
application or process; and
``(2) take such enforcement or other actions with respect
to the covered person as the Bureau determines appropriate.''.
(b) Clerical Amendment.--The table of contents in section 1 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by
inserting after the item relating to section 1037 the following:
``Sec. 1038. Review of loan applications.''.
SEC. 6. MORTGAGE DATA COLLECTION.
(a) In General.--Section 304(b)(4) of the Home Mortgage Disclosure
Act of 1975 (12 U.S.C. 2803(b)(4)) is amended by striking ``census
tract, income level, racial characteristics, age, and gender'' and
inserting ``the applicant or borrower's ZIP Code, census tract, income
level, race, color, religion, national origin, sex, marital status,
sexual orientation, gender identity, and age''.
(b) Protection of Privacy Interests.--Section 304(h)(3)(A) of the
Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(h)(3)(A)) is
amended--
(1) in clause (i), by striking ``and'' at the end;
(2) by redesignating clause (ii) as clause (iii); and
(3) by inserting after clause (i) the following:
``(ii) ZIP Code, census tract, and any
other category of data described in subsection
(b)(4), as the Bureau determines to be
necessary to satisfy the purpose described in
paragraph (1)(E), and in a manner consistent
with that purpose; and''.
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