Fair Lending for All Act

I 118TH CONGRESS 1ST SESSION H. R. 166 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, to ensure that persons injured by discriminatory practices, including organizations that have diverted resources to address discrimi- nation 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. IN THE HOUSE OF REPRESENTATIVES JANUARY 9, 2023 Mr. GREEN of Texas introduced the following bill; which was referred to the Committee on Financial Services 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 injured by discriminatory practices, includ- ing organizations that have diverted resources to address discrimination 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. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 166 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Fair Lending for All 2 Act’’. 3 SEC. 2. OFFICE OF FAIR LENDING TESTING. 4 (a) ESTABLISHMENT.—There is established within 5 the Bureau of Consumer Financial Protection an Office 6 of Fair Lending Testing (hereinafter referred to as the 7 ‘‘Office’’). 8 (b) DIRECTOR.—The head of the Office shall be a 9 Director, who shall— 10 (1) be appointed to a 5-year term by, and re- 11 port to, the Director of the Bureau of Consumer Fi- 12 nancial Protection; 13 (2) appoint and fix the compensation of such 14 employees as are necessary to carry out the duties 15 of the Office under this section; and 16 (3) provide an estimated annual budget to the 17 Director of the Bureau of Consumer Financial Pro- 18 tection. 19 (c) CIVIL SERVICE POSITION.—The position of the 20 Director shall be a career position within the civil service. 21 (d) TESTING.— 22 (1) IN GENERAL.—The Office, in consultation 23 with the Attorney General and the Secretary of 24 Housing and Urban Development, shall conduct 25 testing of compliance with the Equal Credit Oppor- 26 VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 166 IH tunity Act by creditors, through the use of individ- 1 uals who, without any bona fide intent to receive a 2 loan, pose as prospective borrowers for the purpose 3 of gathering information. 4 (2) REFERRAL OF VIOLATIONS.—If, in carrying 5 out the testing described under paragraph (1), the 6 Office believes a person has violated the Equal Cred- 7 it Opportunity Act, the Office shall refer such viola- 8 tion in writing to the Attorney General for appro- 9 priate action. 10 (e) REPORT TO CONGRESS.—Section 707 of the 11 Equal Credit Opportunity Act (15 U.S.C. 1691f) is 12 amended by adding at the end the following: ‘‘In addition, 13 each report of the Bureau shall include an analysis of the 14 testing carried out pursuant to section 2 of the Fair Lend- 15 ing for All Act, and each report of the Bureau and the 16 Attorney General shall include a summary of criminal en- 17 forcement actions taken under section 706A.’’. 18 SEC. 3. PROHIBITION ON CREDIT DISCRIMINATION. 19 (a) IN GENERAL.—Subsection (a) of section 701 of 20 the Equal Credit Opportunity Act (15 U.S.C. 1691) is 21 amended to read as follows: 22 ‘‘(a) It shall be unlawful to discriminate against any 23 person, with respect to any aspect of a credit trans- 24 action— 25 VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 166 IH ‘‘(1) on the basis of race, color, religion, na- 1 tional origin, sex (including sexual orientation and 2 gender identity), marital status, or age (provided the 3 applicant has the capacity to contract); 4 ‘‘(2) on the basis of the person’s ZIP Code, or 5 census tract; 6 ‘‘(3) because all or part of the person’s income 7 derives from any public assistance program; or 8 ‘‘(4) because the person has in good faith exer- 9 cised any right under the Consumer Credit Protec- 10 tion Act.’’. 11 (b) REMOVAL OF CERTAIN REFERENCES TO CREDI- 12 TORS AND APPLICANTS AND DEFINITION ADDED.—The 13 Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) 14 is amended— 15 (1) in section 701(b)— 16 (A) by striking ‘‘applicant’’ each place 17 such term appears and inserting ‘‘person’’; and 18 (B) in paragraph (2), by striking ‘‘appli- 19 cant’s’’ each place such term appears and in- 20 serting ‘‘person’s’’; 21 (2) in section 702— 22 (A) by redesignating subsection (g) as sub- 23 section (h); and 24 VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 166 IH (B) by inserting after subsection (f) the 1 following: 2 ‘‘(g) The term ‘aggrieved person’ includes any person 3 who— 4 ‘‘(1) claims to have been injured by a discrimi- 5 natory credit practice; or 6 ‘‘(2) believes that such person will be injured by 7 a discriminatory credit practice.’’; 8 (3) in section 704A— 9 (A) in subsection (b)(1), by striking ‘‘ap- 10 plicant’’ each place such term appears and in- 11 serting ‘‘aggrieved person’’; and 12 (B) in subsection (c), by striking ‘‘appli- 13 cant’’ and inserting ‘‘aggrieved person’’; 14 (4) in section 705— 15 (A) by striking ‘‘the applicant’’ each place 16 such term appears and inserting ‘‘persons’’; and 17 (B) in subsection (a)— 18 (i) by striking ‘‘a creditor to take’’ 19 and inserting ‘‘taking’’; and 20 (ii) by striking ‘‘applicant’’ and insert- 21 ing ‘‘person’’; and 22 (5) in section 706— 23 (A) by striking ‘‘creditor’’ each place such 24 term appears and inserting ‘‘person’’; 25 VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 166 IH (B) by striking ‘‘creditor’s’’ each place 1 such term appears and inserting ‘‘person’s’’; 2 (C) by striking ‘‘creditors’’ each place such 3 term appears and inserting ‘‘persons’’; and 4 (D) in subsection (f), by striking ‘‘appli- 5 cant’’ and inserting ‘‘aggrieved person’’. 6 SEC. 4. CRIMINAL PENALTIES FOR VIOLATIONS OF THE 7 EQUAL CREDIT OPPORTUNITY ACT. 8 (a) IN GENERAL.—The Equal Credit Opportunity 9 Act (15 U.S.C. 1691 et seq.) is amended by inserting after 10 section 706 the following: 11 ‘‘§ 706A. Criminal penalties 12 ‘‘(a) INDIVIDUAL VIOLATIONS.—Any person who 13 knowingly and willfully violates this title shall be fined not 14 more than $50,000, or imprisoned not more than 1 year, 15 or both. 16 ‘‘(b) PATTERN OR PRACTICE.— 17 ‘‘(1) IN GENERAL.—Any person who engages in 18 a pattern or practice of knowingly and willfully vio- 19 lating this title shall be fined not more than 20 $100,000 for each violation of this title, or impris- 21 oned not more than twenty years, or both. 22 ‘‘(2) PERSONAL LIABILITY OF EXECUTIVE OFFI- 23 CERS AND DIRECTORS OF THE BOARD.—Any execu- 24 tive officer or director of the board of an entity who 25 VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 166 IH knowingly and willfully causes the entity to engage 1 in a pattern or practice of knowingly and willfully 2 violating this title (or who directs another agent, 3 senior officer, or director of the entity to commit 4 such a violation or engage in such acts that result 5 in the director or officer being personally unjustly 6 enriched) shall be— 7 ‘‘(A) fined in an amount not to exceed 100 8 percent of the compensation (including stock 9 options awarded as compensation) received by 10 such officer or director from the entity— 11 ‘‘(i) during the time period in which 12 the violations occurred; or 13 ‘‘(ii) in the one to three year time pe- 14 riod preceding the date on which the viola- 15 tions were discovered; and 16 ‘‘(B) imprisoned for not more than 5 17 years.’’. 18 (b) CLERICAL AMENDMENT.—The table of contents 19 for the Equal Credit Opportunity Act (15 U.S.C. 1691 20 et seq.) is amended by inserting after the item relating 21 to section 706 the following: 22 ‘‘706A. Criminal penalties.’’. VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6211 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 166 IH SEC. 5. REVIEW OF LOAN APPLICATIONS. 1 (a) IN GENERAL.—Subtitle C of the Consumer Fi- 2 nancial Protection Act of 2010 (12 U.S.C. 5531 et seq.) 3 is 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 appli- 13 cation 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 17 such application or process; and 18 ‘‘(2) take such enforcement or other actions 19 with respect to the covered person as the Bureau de- 20 termines appropriate.’’. 21 (b) CLERICAL AMENDMENT.—The table of contents 22 in section 1 of the Dodd-Frank Wall Street Reform and 23 Consumer Protection Act is amended by inserting after 24 the item relating to section 1037 the following: 25 ‘‘Sec. 1038. Review of loan applications.’’. VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6211 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 166 IH 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)) 3 is 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, 6 race, color, religion, national origin, sex, marital status, 7 sexual orientation, gender identity, and age’’. 8 (b) PROTECTION OF PRIVACY INTERESTS.—Section 9 304(h)(3)(A) of the Home Mortgage Disclosure Act of 10 1975 (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 de- 19 scribed in paragraph (1)(E), and in a man- 20 ner consistent with that purpose; and’’. 21 Æ VerDate Sep 11 2014 22:11 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H166.IH H166 kjohnson on DSK79L0C42PROD with BILLS