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Illinois Attorney General Kwame Raoul
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October 17, 2019


Chicago — Attorney General Kwame Raoul, along with a coalition of 12 attorneys general, today submitted a comment letter urging the Consumer Financial Protection Bureau (CFPB) not to adopt new rules that would undermine the ability to enforce fair lending laws and prevent discrimination against communities of color in the mortgage lending market.

“The CFPB’s attempts to eliminate or weaken reporting requirements will result in continued discriminatory mortgage lending practices and result in homeowners of color being denied access to homeownership,” Raoul said. “These actions will also leave the United States vulnerable to another financial crisis. I urge the CFPB to not adopt these new rules that risk the economic security of all residents.

In the comment letter, Raoul and the coalition challenge a May 2019 CFPB proposal limiting the data financial institutions are required to report to the CFPB under the Home Mortgage Disclosure Act (HMDA), a 1975 law that requires mortgage lenders to make certain mortgage data publicly available to ensure compliance with fair lending laws. Some of this data includes information which lenders already collect to comply with other regulations as well as their own underwriting standards, such as loan-to-value ratio, origination charges, interest rate, debt-to-income ratio, property interest and the reason for denial.

By hiding important data points, the CFPB gives a windfall to financial institutions who will be able to resume predatory lending practices. Regulations that went into effect in 2018 required financial institutions to report more of the data that they already collect so that more information – including the costs of the loan and any predatory attributes – could be easily viewed in the HMDA data. When these new data fields were set in 2015 to help avoid another subprime lending crisis like the one that led to the 2008 economic recession, the CFPB noted that the data reporting requirements struck the proper balance between the burden placed on smaller lenders and the need for data to ensure that mortgage lending is conducted in a non-discriminatory manner.

Now, the CFPB is soliciting comments on which data fields should be eliminated from reporting. The CFPB's attempts to water down the data that financial institutions must report will severely inhibit efforts to prevent another financial crisis brought about by predatory lending.

Raoul and the coalition argue these changes undermine the core function of the HMDA and would impede the public and public officials’ ability to ensure that mortgage lending is being conducted in a non-discriminatory manner in their communities.

Joining Raoul in the comment letter are the attorneys general of California, Connecticut, Delaware, the District of Columbia, Hawaii, Massachusetts, Michigan, Minnesota, New York, Oregon, Pennsylvania, and Rhode Island.


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