St. Louis Post-Dispatch: Discriminatory mortgage lending harder to detect as banking regulations rolled back, critics say
St. Louis Post-Dispatch, June 2, 2018: Discriminatory mortgage lending harder to detect as banking regulations rolled back, critics say
The title of the new federal law that rolls back Obama-era banking regulations includes the words “relief” and “consumer protection.” A close look at the bill, however, suggests that banks are the ones getting relief while consumers are losing protections.
Under the new Economic Growth, Regulatory Relief and Consumer Protection Act, signed by President Donald Trump on May 24, smaller banks no longer are required to report detailed information about mortgage loan applicants.
That change benefits a majority of U.S. banks, which no longer will have to comply with the detailed reporting requirements outlined in the Dodd-Frank Act of 2010.
For those banks, the new law means less regulation and oversight.
But fair-housing advocates — especially in cities like St. Louis with a history of redlining and other discriminatory lending practices — say less information means it’ll be harder to identify problems and push for reforms.
Under Dodd-Frank, which bolstered provisions of the Home Mortgage Disclosure Act of 1975, the number of data fields required for reporting by banks more than doubled to include fields like interest rate information, loan terms, credit score and age of borrower.
Under the new law, smaller banks with fewer than 500 closed-end loans or open-end credit lines do not have to report the additional data fields required by Dodd-Frank. The banks still collect the data, according to a letter sent to Congress by the National Community Reinvestment Coalition, but are not required to report it.