[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H. Con. Res. 391 Introduced in House (IH)]







110th CONGRESS
  2d Session
H. CON. RES. 391

Recognizing the disparities that are associated with predatory lending 
abuses in minority communities and expressing the sense of the Congress 
that as new abuses continue to emerge, such laws should ensure that all 
  those responsible for representing and protecting families have the 
            authority to act to address these new problems.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 17, 2008

    Ms. Clarke (for herself and Mr. Towns) submitted the following 
concurrent resolution; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                         CONCURRENT RESOLUTION


 
Recognizing the disparities that are associated with predatory lending 
abuses in minority communities and expressing the sense of the Congress 
that as new abuses continue to emerge, such laws should ensure that all 
  those responsible for representing and protecting families have the 
            authority to act to address these new problems.

Whereas minorities have a long history of rejection by prime-rate lenders;
Whereas subprime mortgages are typically offered to borrowers who do not meet 
        the credit standards for borrowing in the prime market and these loans 
        cater to people with blemished credit records or little experience with 
        debt;
Whereas inadequate attention has been paid to the concentration of these 
        mortgages in neighborhoods that are largely African-American, Latino, or 
        both;
Whereas some of the biggest lenders in minority neighborhoods are mortgage 
        companies that provide only subprime mortgages, not full-service banks 
        that do a range of lending;
Whereas a 2006 study by the Center for Responsible Lending (CRL), a nonprofit 
        home ownership research group, concludes that African-Americans and 
        Latinos are more likely to be steered into high-risk subprime mortgages;
Whereas advocacy groups say poor and minority borrowers who qualify for 
        traditional mortgages are frequently nevertheless steered into mortgages 
        that reset automatically to much higher interest rates after a short 
        ``teaser'' period resulting in payment increases of hundreds of dollars 
        each month;
Whereas these subprime mortgages are characterized by low ``introductory'' 
        interest rates, usually for the first 2 or 3 years and these rates 
        frequently rise rapidly in subsequent years;
Whereas African-Americans and Latinos are getting charged for more expensive 
        mortgage loans than White borrowers, even when they have equal credit 
        histories;
Whereas a nonprofit organization dedicated to eliminating abusive financial 
        practices examined 50,000 mortgages and discovered that the two minority 
        groups were almost a third more likely to pay more for a loan than 
        similarly situated White borrowers;
Whereas the Center for Community Change reports that African-American and Latino 
        borrowers are more likely to recieve subprime loans than White 
        borrowers;
Whereas Harvard Law School Professor Howell Jackson has conducted research 
        demonstrating racial disparities in loan costs due to yield-spread 
        premiums;
Whereas Professor Jackson's research has concluded that African-Americans pay an 
        additional up front charge averaging $474 per loan, while Latinos pay an 
        average additional $580 per loan on average;
Whereas other causes of pricing disparities may include the inconsistent 
        application of objective pricing criteria, targeting of families of 
        color by higher rate lenders or brokers, and lack of investment by lower 
        cost lenders in minority communities;
Whereas information from the United States Federal Reserve demonstrates that 
        African-Americans are 3.2 times more likely to receive a subprime loan 
        than White borrowers;
Whereas in 2007, the number of homeowners defaulting on subprime mortgages began 
        to soar;
Whereas it is estimated that as many as 2,200,000 households are at risk of 
        defaulting on their subprime loans and losing their homes;
Whereas minorities are facing foreclosure or losing their homes 
        disproportionately; and
Whereas Latino civil rights organizations say that this discrimination affects 
        the large wave of first-time and first-generation Latino home buyers who 
        are showing up in the housing market: Now, therefore, be it
    Resolved by the House of Representatives (the Senate concurring), 
That the Congress--
            (1) recognizes that for most types of subprime mortgages, 
        borrowers of color are more likely to receive higher rate loans 
        and there are many factors that have played roles in making 
        these mortgages more costly to these borrowers;
            (2) encourages fair pricing of home mortgages that is based 
        only on legitimate risk factors and facilitates economic 
        progress for all borrowers;
            (3) encourages lenders to eliminate discretionary pricing 
        in the subprime mortgage market and prompts them to adopt 
        transparent, market-driven prices for mortgages representing 
        similar risks;
            (4) encourages more transparency by--
                    (A) addressing yield-spread premiums in laws 
                designed to protect homeowners from abusive lending 
                practices;
                    (B) prohibiting yield-spread premiums subprime and 
                nontraditional home loans;
                    (C) improving transparency of yield-spread premiums 
                by requiring brokers to explain to applicants what the 
                rate, payment, and fees on the loan could be with and 
                without the yield-spread premium;
                    (D) following the trends of the securities 
                industry, holding lenders and brokers responsible for 
                providing loans that are suitable for a given borrower; 
                and
                    (E) prohibiting prepayment penalties in subprime 
                loans;
            (5) encourages preventing pricing discrimination by 
        requiring subprime lenders to disclose more detailed pricing 
        and underwriting information in their Home Mortgage Disclosure 
        Act data;
            (6) encourages regulators to report annually on the number 
        of fair lending examinations performed and for each examination 
        provide publicly available information, including--
                    (A) identifying the indicators of potential 
                discriminatory activity, if any; and
                    (B) identifying the protected class or classes 
                believed to be potentially disadvantaged by such 
                activity, and the outcome of each review;
            (7) encourages public and private partnerships to ensure 
        responsible investments are made in underserved communities;
            (8) recognizes that policymakers should review whether 
        lower cost lenders need additional incentives to help meet the 
        credit needs of communities of color;
            (9) upholds the laws and regulations that prohibit 
        predatory, irresponsible subprime lending and have proven 
        effective in reducing the number of abusive loans while 
        maintaining a vibrant market for subprime home loans;
            (10) urges policymakers to endorse legislation that builds 
        on the proven methods for protecting families from abusive 
        lending while retaining access to subprime credit; and
            (11) urges policy makers to oppose pre-emption of State and 
        local laws designed to protect homeowners.
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