In July of 2020, Texas Housers posted on our blog about the lawsuit we filed alongside cities and fair housing organizations, under the leadership of the National Reinvestment Coalition and represented by Public Citizens Litigation Group, against the U.S. Consumer Financial Protection Bureau for illegally changing the requirements of the Home Mortgage Disclosure Act. In the federal department’s rule change, the CFPB arbitrarily raised the loan-volume threshold for reporting, now excluding 47% of financial institutions that would be required to publicly report on mortgage loans.
Since 1975, laws like the Home Mortgage Disclosure Act have allowed the public to hold banks accountable when they do not lend to borrowers of color or those living in low-income neighborhoods. The Home Mortgage Disclosure Act requires financial institutions to make public details about whom the make home loans to including the race and ethnicity of the borrower and the census tract where the covered home is located.
In response to this unjust action, Texas Housers, NCRC, and our allies filed motion for summary judgment last week asking the Court to strike down the rule change. We argue that the Consumer Financial Protection Bureau “failed to provide a reasoned explanation for its change in position, conducted a flawed analysis of the costs and benefits of the rule, did not meaningfully address factors it is required by statute to consider, failed to adequately consider comments submitted in opposition to the rule, and relied on considerations that have no sound basis in law.”
When regulators fail to act, local community groups can use this precious public data to hold banks that are discriminating against groups and neighborhoods accountable to force change. Texas Housers has used this data in several cities to monitor for fair lending and housing violations. By excluding thousands of financial institutions from these rules, the Consumer Financial Protection Bureau essentially give these banks a license to discriminate and shields them from scrutiny.
You can read the entire motion here.14-Plaintiffs-Motion-for-Summary-Judgment