NCRC condemns CFPB plan to help lenders hide data

The Consumer Financial Protection Bureau (CFPB) today released a proposal for new rules around how banks report data under the Home Mortgage Disclosure Act (HMDA), as well as an advanced notice of other HMDA reporting changes the agency is considering.

Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC), made the following statement:

“The only vision apparent in these proposals is a desire to hide evidence of discriminatory or risky lending by smaller banks and mortgage companies. The only beneficiaries of these changes will be bad actors, a subset of smaller lenders that are doing the greatest disservice to their communities or creating the greatest risk to our financial system. Even smaller volume lenders can be significant lenders in smaller towns and rural areas.

“Data is essential to track the performance of mortgage and small business lenders, and as an early detection system for risky practices. These changes won’t protect consumers or the financial system, and they won’t make business easier for small lenders because lenders have already set up systems to report the data that the government wants to help them hide. Lenders, including small volume lenders, have been reporting data for decades. So what’s the point? The only obvious one is to make it harder for the American public to see what’s going on.”

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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