Public Citizen Succeeds in Overturning a Rule That Weakened an Important an Anti-Discrimination Tool
- 47 percent The share of financial institutions that would have been exempted from existing reporting requirements about mortgage loans under the 2020 rule
- 750 The number of credit unions that would have been newly exempted from reporting mortgage loan data under the 2020 rule
- 1200 The number of census tracts where the 2020 Rule would have resulted in a 20% or greater data loss
“Community organizations and municipalities use data reported under the Home Mortgage Disclosure Act to help root out discrimination in lending and to identify communities in need of targeted investment. We fought the CFPB’s 2020 Rule because it would have eliminated a huge swath of mortgage data—and we won.”Public Citizen Litigation Group attorney Adam Pulver
Enacted in 1975, the Home Mortgage Disclosure Act requires financial institutions to publicly disclose data about mortgages and other home loans. The disclosures provide information to the public and government entities, to fight against redlining or other violations of fair housing or fair lending laws. HMDA data reporting has prompted a significant increase in lending to low- and moderate-income neighborhoods and people of color.
In 2020, the Consumer Financial Protection Bureau issued a rule dramatically increasing the threshold for required reporting. In effect, the rule exempted thousands of financial institutions from reporting under the Act, thereby reducing the availability of data that the public and public officials have used to combat redlining and other fair lending and fair housing violations and making identifying such practices more difficult.
On behalf of the National Community Reinvestment Coalition and the City of Toledo, Public Citizen sued the CFPB to challenge the rule. We argued that the CFPB did not have a solid foundation in law.
In September 2022, the court came to its summary judgement which was a split decision. It agreed with Public Citizen on the part of the rule that addressed closed-end mortgage loans, vacating that aspect; with the parts of the rule that dealt with open-end lines of credit, however, the court ruled in favor of the CFPB.