The Senate Banking Bill Plays an Appalling Shell Game on Race

Banks are required to collect racial data on their loans so that regulators can make sure they aren’t discriminating against blacks and Hispanics. But the banking industry discriminated anyway during the housing bubble of the aughts, claiming that the differences were due to low credit scores, not redlining. So when Dodd-Frank passed in 2010, it required banks to collect more information. This was reasonable: if the real reason is credit scores, then let’s see the credit scores.

Needless to say, banks didn’t like this, and as soon as Mick Mulvaney took over the Consumer Finance Protection Bureau, he set about gutting the rule. But that wasn’t enough. Now, in one of the most egregious rollbacks of Dodd-Frank regulations, Congress plans to eliminate this requirement:

For decades, banks have been required under the 1975 Home Mortgage Disclosure Act to report borrowers’ race, ethnicity and Zip code so officials could tell whether lenders were serving the communities in which they are located and identify racist lending practices such as redlining. But discriminatory practices continued, with the financial industry disproportionately targeting black and Hispanic borrowers with subprime mortgages loaded with high fees and adjustable interest rates that skyrocketed after the stock market crashed in 2008.

….Lenders were supposed to start gathering extra information about borrowers’ ages and credit scores, as well as interest rates and other loan-pricing features in January….But [Mulvaney] said the agency plans to reconsider the new requirements, and that banks would not be penalized for data collection errors in 2018. He also stripped the bureau’s fair-lending office of its enforcement powers. The Senate bill would repeal many of the new reporting requirements, exempting small lenders making 500 or fewer mortgages a year from the expanded data disclosure.

This is ridiculous. Loan data in modern banks is kept on a new invention called a “computer.” All the data is already there, and providing it just means grabbing a few more fields from a database. The real reason for eliminating this requirement has nothing to do with the burden it places on community banks. It’s there so that these banks can continue to discriminate and then pretend that there’s not really any discrimination—and we’d all understand that if we only saw all the other loan data.

What a con. And a dozen Democrats are supporting this.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate