Here I sit, on a Saturday night in Chicago. I have thus far curled up with dailykos while my girlfriend watches a movie. (Two notes: It is great to have a girlfriend who does not mind dating a nerd. It is also May 7th and it is somehow still kind of cold, so this seems more enticing.) The diaries by
greatbasin2 and
Representative Brad Miller have sparked an internal need to post on Predatory Lending.
I really feel the disparate discrimination going on in America is in need of immediate attention, I hope by using my experience in Fair Lending and researching some tonight I can possibly provide information to even one person. Not to be all mushy, but essentially that is what I love about dailykos. Each post will inherently cross someone's path and make some type of difference.
In 1975 the Home Mortgage Disclosure Act (HMDA) was passed. Initially the goal of HMDA was to provide data on who Lenders were approving and denying. This was up until this past year.
March 1st of every year lenders must submit their HMDA reportable loans to their regulator. On March 31st the information is available to the public by request. The reason 2004's data is different is due to the rate spread now being reported. The rate spread shows the amount the borrower paid
over the treasury rate. With the race, gender, and ethnicity it is easy to run reports to see exactly who is receiving these loans.
Greatbasin2 and
Representative Brad Miller referenced the Center for Responsible Lending for important information. I would also suggest the National Community Reinvestment Coalition report and InnerCityPress.org. These companies, along with others have spurred an investigation by AG Elliot Spitzer. I exalt and admire the work they do.
As reported by the WSJ, the NYT, the Chicago Tribune, among others Eliot Spitzer's office has requested information from Citibank, HSBC, and JPMorgan Chase. These lenders are among the largest in the United States, all reporting well over 1 million applications each. The preliminary results show some cases where African Americans received rate spread loans two times more than Whites. Females were also much more likely to be denied loans than males.
Appauling right? Who knows what will come of the New York AG's results, and what consequences the lenders will face. But, much more information needs to be provided in order to accurately assess how these lenders are affecting American lives. This can only be done by increased regulation. For example, there are many times when a customer at a bank may decide to look elsewhere for a better rate. Many times the bank will offer a lower rate in order to keep the customer. This is at the branch/office/telesales/whoevers discretion. Who are they giving these exceptions to? This is the exact definition of disparate discrimination, and these are the things that we must crack down on and we must demand accountability.
While the Miller-Watt-Frank bill will be incredibly effective, I believe we must request more information in order to truly identify if lenders are preying on consumers.
Well, I am off. Have a good night all.