Examining Educational Redlining in Lending Act

I 116TH CONGRESS 2D SESSION H. R. 8039 To require the Bureau of Consumer Financial Protection to conduct an assessment of the use of certain educational data in determining the creditworthiness of an applicant, and for other purposes. IN THE HOUSE OF REPRESENTATIVES AUGUST 14, 2020 Ms. FUDGE (for herself and Mrs. BEATTY) introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the Bureau of Consumer Financial Protection to conduct an assessment of the use of certain edu- cational data in determining the creditworthiness of an applicant, and for other purposes. 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 ‘‘Examining Edu- 4 cational Redlining in Lending Act’’. 5 SEC. 2. ASSESSMENT OF CERTAIN EDUCATIONAL DATA. 6 (a) ASSESSMENT.—Not later than 180 days after the 7 date of the enactment of this Act and annually thereafter, 8 VerDate Sep 11 2014 00:24 Sep 02, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8039.IH H8039 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8039 IH the Bureau of Consumer Financial Protection (referred to 1 in this section as the ‘‘Bureau’’) shall, in coordination with 2 relevant executive agencies and national civil rights stake- 3 holders, assess— 4 (1) the use of certain educational data by cov- 5 ered persons in determining the creditworthiness of 6 an applicant; 7 (2) the use of an underwriting process that in- 8 volves gathering data points and creating applicant 9 profiles, including automated or algorithmic proc- 10 esses, and the risks of such use, by covered persons 11 to determine the creditworthiness of an applicant; 12 and 13 (3) what policies and guidelines are in place to 14 ensure decisions do not result in a disparate impact 15 on a protected class. 16 (b) REPORT TO CONGRESS.—Not later than 60 days 17 after the completion of each assessment required under 18 subsection (a) and annually thereafter, the Bureau shall 19 submit to the Committee on Financial Services of the 20 House of Representatives and the Committee on Banking, 21 Housing, and Urban Affairs of the Senate the findings 22 of such assessment and any recommendations based on 23 such findings. 24 VerDate Sep 11 2014 00:24 Sep 02, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8039.IH H8039 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8039 IH (c) PUBLICATION.—Not later than 30 days after the 1 completion of the assessment required under subsection 2 (a), the Bureau shall make available on a publicly acces- 3 sible website— 4 (1) the findings of the assessment under sub- 5 section (a); 6 (2) a list of all covered persons that use certain 7 educational data; and 8 (3) a list of all covered persons that use an un- 9 derwriting process that involves gathering data 10 points and creating applicant profiles, including 11 automated or algorithmic processes, to determine the 12 creditworthiness of an applicant. 13 (d) DEFINITIONS.—In this section: 14 (1) APPLICANT’S BACKGROUND.—The term 15 ‘‘applicant’s background’’ includes data related to or 16 derived from the following: 17 (A) Attendance at an academic institution. 18 (B) Academic majors pursued at an aca- 19 demic institution. 20 (C) Grades or test scores from or used for 21 admission into an academic institution. 22 (D) Educational attainment. 23 (2) CERTAIN EDUCATIONAL DATA.—The term 24 ‘‘certain educational data’’ means data, including 25 VerDate Sep 11 2014 00:24 Sep 02, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8039.IH H8039 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8039 IH non-individualized data, that indicates or is created, 1 derived, or inferred from an applicant’s background 2 including whether an applicant has attended any of 3 the following: 4 (A) An eligible institution. 5 (B) A junior or community college. 6 (3) COVERED PERSON.—The term ‘‘covered 7 person’’ has the meaning given such term in section 8 1002 of the Consumer Financial Protection Act of 9 2010 (12 U.S.C. 5481). 10 (4) ELIGIBLE INSTITUTION.—The term ‘‘eligi- 11 ble institution’’ has the meaning given that term in 12 section 371(a) of the Higher Education Act of 1965 13 (20 U.S.C. 1067q(a)). 14 (5) JUNIOR OR COMMUNITY COLLEGE.—The 15 term ‘‘junior or community college’’ has the meaning 16 given that term in section 312(f) of the Higher Edu- 17 cation Act of 1965 (20 U.S.C. 1058(f)). 18 Æ VerDate Sep 11 2014 00:24 Sep 02, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H8039.IH H8039 pbinns on DSKJLVW7X2PROD with BILLS