US Senate bill would diminish mortgage disclosures by banks

WASHINGTON, March 13, (AP): Buried within new Senate legislation to roll back restraints on banks is a provision that would exempt an estimated 85 percent of all US banks and credit unions from public reporting requirements, raising fears that discriminatory practices by lenders could go undetected.

The data that would be exempt from reporting includes the financial information of borrowers and loan applicants, along with their race and sex.

Some Democratic lawmakers, community activists and low-income-housing advocates have raised the alarm over the prospect of diminished mortgage disclosures by banks. Removing the spotlight, they say, could allow lenders to unfairly deny loans or charge excessive interest and escape notice.

The legislation “would once again place low-income and borrowers of color at risk of falling prey to the same unscrupulous lending practices that helped cause the Great Recession,” Marc Morial, president of the National Urban League, wrote in an open letter to the Senate.

“We must preserve and strengthen these important protections and continue collecting the data that exposes disparities in the industry.”

The overall bill would alter key elements of the Dodd-Frank law enacted to prevent a repeat of the financial crisis 10 years ago that brought the US economy to the brink of collapse. Buttressed by support from a number of Democrats, it has a strong chance of passage in the Republican-led Senate.

A final vote is expected this week. Prospects in the GOP-dominated House are unclear.

The legislation edged forward Monday with a 66-30 procedural vote that put the split among Democrats on display. Sixteen Democrats and one independent voted with the Republicans to move ahead, breaking with Minority Leader Chuck Schumer, D-New York, and Sen Elizabeth Warren, D-Massachusetts.

Majority Leader Mitch McConnell, speaking on the Senate floor, called the bill a “modest set of reforms” that would enable community banks to lend to local businesses “without having to navigate a maze of regulation that was designed for far bigger organizations.”