Fair Lending for All Act

IB Union Calendar No. 263 117TH CONGRESS 2D SESSION H. R. 166 [Report No. 117–349] To establish an Office of Fair Lending Testing to test for compliance with the Equal Credit Opportunity Act, to strengthen the Equal Credit Oppor- tunity Act and to provide for criminal penalties for violating such Act, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 4, 2021 Mr. GREEN of Texas introduced the following bill; which was referred to the Committee on Financial Services JUNE 7, 2022 Reported with amendments, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on January 4, 2021] VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 166 RH A BILL To establish an Office of Fair Lending Testing to test for compliance with the Equal Credit Opportunity Act, to strengthen the Equal Credit Opportunity Act and to provide for criminal penalties for violating such Act, and for other purposes. VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 166 RH Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Fair Lending for All 4 Act’’. 5 SEC. 2. OFFICE OF FAIR LENDING TESTING. 6 (a) ESTABLISHMENT.—There is established within the 7 Bureau of Consumer Financial Protection an Office of Fair 8 Lending Testing (hereinafter referred to as the ‘‘Office’’). 9 (b) DIRECTOR.—The head of the Office shall be a Di- 10 rector, who shall— 11 (1) be appointed to a 5-year term by, and report 12 to, the Director of the Bureau of Consumer Financial 13 Protection; 14 (2) appoint and fix the compensation of such 15 employees as are necessary to carry out the duties of 16 the Office under this section; and 17 (3) provide an estimated annual budget to the 18 Director of the Bureau of Consumer Financial Protec- 19 tion. 20 (c) CIVIL SERVICE POSITION.—The position of the Di- 21 rector shall be a career position within the civil service. 22 (d) TESTING.— 23 (1) IN GENERAL.—The Office, in consultation 24 with the Attorney General and the Secretary of Hous- 25 VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 166 RH ing and Urban Development, shall conduct testing of 1 compliance with the Equal Credit Opportunity Act 2 by creditors, through the use of individuals who, with- 3 out any bona fide intent to receive a loan, pose as 4 prospective borrowers for the purpose of gathering in- 5 formation. 6 (2) REFERRAL OF VIOLATIONS.—If, in carrying 7 out the testing described under paragraph (1), the Of- 8 fice believes a person has violated the Equal Credit 9 Opportunity Act, the Office shall refer such violation 10 in writing to the Attorney General for appropriate 11 action. 12 (e) REPORT TO CONGRESS.—Section 707 of the Equal 13 Credit Opportunity Act (15 U.S.C. 1691f) is amended by 14 adding at the end the following: ‘‘In addition, each report 15 of the Bureau shall include an analysis of the testing car- 16 ried out pursuant to section 2 of the Fair Lending for All 17 Act, and each report of the Bureau and the Attorney Gen- 18 eral shall include a summary of criminal enforcement ac- 19 tions taken under section 706A.’’. 20 SEC. 3. PROHIBITION ON CREDIT DISCRIMINATION. 21 (a) IN GENERAL.—Subsection (a) of section 701 of the 22 Equal Credit Opportunity Act (15 U.S.C. 1691) is amended 23 to read as follows: 24 VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 166 RH ‘‘(a) It shall be unlawful to discriminate against any 1 person, with respect to any aspect of a credit transaction— 2 ‘‘(1) on the basis of race, color, religion, national 3 origin, sex (including sexual orientation and gender 4 identity), marital status, or age (provided the appli- 5 cant has the capacity to contract); 6 ‘‘(2) on the basis of the person’s zip code, or cen- 7 sus tract; 8 ‘‘(3) because all or part of the person’s income 9 derives from any public assistance program; or 10 ‘‘(4) because the person has in good faith exer- 11 cised any right under the Consumer Credit Protection 12 Act.’’. 13 (b) REMOVAL OF CERTAIN REFERENCES TO CREDI- 14 TORS AND APPLICANTS AND DEFINITION ADDED.—The 15 Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is 16 amended— 17 (1) in section 701(b)— 18 (A) by striking ‘‘applicant’’ each place such 19 term appears and inserting ‘‘person’’; and 20 (B) in paragraph (2), by striking ‘‘appli- 21 cant’s’’ each place such term appears and insert- 22 ing ‘‘person’s’’; 23 (2) in section 702— 24 VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 166 RH (A) by redesignating subsection (g) as sub- 1 section (h); and 2 (B) by inserting after subsection (f) the fol- 3 lowing: 4 ‘‘(g) The term ‘aggrieved person’ includes any person 5 who— 6 ‘‘(1) claims to have been injured by a discrimi- 7 natory credit practice; or 8 ‘‘(2) believes that such person will be injured by 9 a discriminatory credit practice.’’; 10 (3) in section 704A— 11 (A) in subsection (b)(1), by striking ‘‘appli- 12 cant’’ each place such term appears and insert- 13 ing ‘‘aggrieved person’’; and 14 (B) in subsection (c), by striking ‘‘appli- 15 cant’’ and inserting ‘‘aggrieved person’’; 16 (4) in section 705— 17 (A) by striking ‘‘the applicant’’ each place 18 such term appears and inserting ‘‘persons’’; and 19 (B) in subsection (a)— 20 (i) by striking ‘‘a creditor to take’’ and 21 inserting ‘‘taking’’; and 22 (ii) by striking ‘‘applicant’’ and in- 23 serting ‘‘person’’; and 24 (5) in section 706— 25 VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 166 RH (A) by striking ‘‘creditor’’ each place such 1 term appears and inserting ‘‘person’’; 2 (B) by striking ‘‘creditor’s’’ each place such 3 term appears and inserting ‘‘person’s’’; 4 (C) by striking ‘‘creditors’’ each place such 5 term appears and inserting ‘‘persons’’; and 6 (D) in subsection (f), by striking ‘‘appli- 7 cant’’ and inserting ‘‘aggrieved person’’. 8 SEC. 4. CRIMINAL PENALTIES FOR VIOLATIONS OF THE 9 EQUAL CREDIT OPPORTUNITY ACT. 10 (a) IN GENERAL.—The Equal Credit Opportunity Act 11 (15 U.S.C. 1691 et seq.) is amended by inserting after sec- 12 tion 706 the following: 13 ‘‘§ 706A. Criminal penalties 14 ‘‘(a) INDIVIDUAL VIOLATIONS.—Any person who 15 knowingly and willfully violates this title shall be fined not 16 more than $50,000, or imprisoned not more than 1 year, 17 or both. 18 ‘‘(b) PATTERN OR PRACTICE.— 19 ‘‘(1) IN GENERAL.—Any person who engages in 20 a pattern or practice of knowingly and willfully vio- 21 lating this title shall be fined not more than $100,000 22 for each violation of this title, or imprisoned not more 23 than twenty years, or both. 24 VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 166 RH ‘‘(2) PERSONAL LIABILITY OF EXECUTIVE OFFI- 1 CERS AND DIRECTORS OF THE BOARD.—Any executive 2 officer or director of the board of an entity who know- 3 ingly and willfully causes the entity to engage in a 4 pattern or practice of knowingly and willfully vio- 5 lating this title (or who directs another agent, senior 6 officer, or director of the entity to commit such a vio- 7 lation or engage in such acts that result in the direc- 8 tor or officer being personally unjustly enriched) shall 9 be— 10 ‘‘(A) fined in an amount not to exceed 100 11 percent of the compensation (including stock op- 12 tions awarded as compensation) received by such 13 officer or director from the entity— 14 ‘‘(i) during the time period in which 15 the violations occurred; or 16 ‘‘(ii) in the one to three year time pe- 17 riod preceding the date on which the viola- 18 tions were discovered; and 19 ‘‘(B) imprisoned for not more than 5 20 years.’’. 21 (b) CLERICAL AMENDMENT.—The table of contents for 22 the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) 23 is amended by inserting after the item relating to section 24 706 the following: 25 ‘‘706A. Criminal penalties.’’. VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6213 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 166 RH SEC. 5. REVIEW OF LOAN APPLICATIONS. 1 (a) IN GENERAL.—Subtitle C of the Consumer Finan- 2 cial Protection Act of 2010 (12 U.S.C. 5531 et seq.) is 3 amended by adding at the end the following: 4 ‘‘SEC. 1038. REVIEW OF LOAN APPLICATIONS. 5 ‘‘(a) IN GENERAL.—The Bureau shall carry out re- 6 views of loan applications and the process of taking loan 7 applications being used by covered persons to ensure such 8 applications and processes do not violate the Equal Credit 9 Opportunity Act or any other Federal consumer financial 10 law. 11 ‘‘(b) PROHIBITION AND ENFORCEMENT.—If the Bu- 12 reau determines under subsection (a) that any loan applica- 13 tion or process of taking a loan application violates the 14 Equal Credit Opportunity Act or any other Federal con- 15 sumer financial law, the Bureau shall— 16 ‘‘(1) prohibit the covered person from using such 17 application or process; and 18 ‘‘(2) take such enforcement or other actions with 19 respect to the covered person as the Bureau deter- 20 mines appropriate.’’. 21 (b) CLERICAL AMENDMENT.—The table of contents in 22 section 1 of the Dodd-Frank Wall Street Reform and Con- 23 sumer Protection Act is amended by inserting after the item 24 relating to section 1037 the following: 25 ‘‘Sec. 1038. Review of loan applications.’’. VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6213 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 166 RH SEC. 6. MORTGAGE DATA COLLECTION. 1 (a) IN GENERAL.—Section 304(b)(4) of the Home 2 Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(b)(4)) is 3 amended by striking ‘‘census tract, income level, racial 4 characteristics, age, and gender’’ and inserting ‘‘the appli- 5 cant or borrower’s zip code, census tract, income level, race, 6 color, religion, national origin, sex, marital status, sexual 7 orientation, gender identity, and age’’. 8 (b) PROTECTION OF PRIVACY INTERESTS.—Section 9 304(h)(3)(A) of the Home Mortgage Disclosure Act of 1975 10 (12 U.S.C. 2803(h)(3)(A)) is amended— 11 (1) in clause (i), by striking ‘‘and’’ at the end; 12 (2) by redesignating clause (ii) as clause (iii); 13 and 14 (3) by inserting after clause (i) the following: 15 ‘‘(ii) zip code, census tract, and any 16 other category of data described in sub- 17 section (b)(4), as the Bureau determines to 18 be necessary to satisfy the purpose described 19 in paragraph (1)(E), and in a manner con- 20 sistent with that purpose; and’’. 21 Amend the title so as to read: ‘‘A bill to establish an Office of Fair Lending Testing to test for compliance with the Equal Credit Opportunity Act, to strengthen the Equal Credit Opportunity Act, to ensure that persons in- jured by discriminatory practices, including organizations that have diverted resources to address discrimination VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 166 RH and whose mission has been frustrated by illegal acts, can seek relief under such Act and to provide for criminal penalties for violating such Act, and for other purposes.’’. VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS Union Calendar No. 263 117TH CONGRESS 2D SESSION H. R. 166 [Report No. 117–349] A BILL To establish an Office of Fair Lending Testing to test for compliance with the Equal Credit Oppor- tunity Act, to strengthen the Equal Credit Op- portunity Act and to provide for criminal pen- alties for violating such Act, and for other pur- poses. JUNE 7, 2022 Reported with amendments, committed to the Committee of the Whole House on the State of the Union, and or- dered to be printed VerDate Sep 11 2014 00:40 Jun 08, 2022 Jkt 029200 PO 00000 Frm 00012 Fmt 6651 Sfmt 6651 E:\BILLS\H166.RH H166 kjohnson on DSK79L0C42PROD with BILLS