H. R. 2324
IN THE HOUSE OF REPRESENTATIVES
April 15, 2019
Mr. García of Illinois introduced the following bill; which was referred to the Committee on Financial Services
To amend the Equal Credit Opportunity Act to require creditors to request demographic information from applicants for certain types of credit in order to prevent discriminatory lending practices with respect to those applicants, and for other purposes.
This Act may be cited as the
Protections in Consumer Lending Act.
Collection of demographic information
The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is amended by inserting after section 704B (15 U.S.C. 1691c–2) the following:
Collection of demographic information
In this section—
the terms annual percentage rate and interest have the meanings given those terms in section 987(i) of title 10, United States Code;
the term covered transaction means—
the extension of credit with respect to the purchase of a motor vehicle;
the extension of credit with respect to which the annual percentage rate of interest imposed is greater than 36 percent;
the extension of credit—
in an amount that is less than $15,000; or
with respect to which the period of repayment is less than 3 years; and
the opening of a credit card account; and
the term covered year means a year in which a creditor engages in a covered transaction.
Purpose; sense of Congress
The purpose of this section is to provide the Bureau and the public with data that can be used to—
help determine whether creditors are serving the credit-lending needs of the communities in which the creditors are located; and
identifying possible discriminatory lending patterns; and
enforcing antidiscrimination statutes, including this title.
Sense of Congress
It is the sense of Congress that nothing in this section is intended to encourage unsound lending practices or the allocation of credit.
Collection of information
Subject to the other provisions of this section, after a creditor decides whether to approve an application submitted by an applicant with respect to a covered transaction, the creditor—
request from the applicant the information described in paragraph (2) with respect to the applicant;
when collecting information under clause (i), provide a disclaimer to the applicant regarding—
the purposes of the collection of the information; and
the right of the applicant under paragraph (3);
itemize the information with respect to the application, including any information collected under clause (i), in order to clearly and conspicuously disclose—
the number of the application and the date on which the application was received;
the type and purpose of the covered transaction;
the amount of the credit or credit limit applied for with respect to the covered transaction;
if applicable, the amount of the credit or credit limit approved for the applicant with respect to the covered transaction;
the type of action taken with respect to the application, the date on which that action is taken, and, if the action taken is to reject the application, the reason for that rejection;
the originator of the covered transaction;
the credit score and debt to income ratio of the applicant;
if the covered transaction is a loan, whether or not the loan is amortizing; and
any additional data that the Bureau determines would aid in fulfilling the purposes of this section; and
in accordance with subsection (e), submit any information collected under clause (i) and the information itemized under clause (iii) to the Bureau, which shall—
store and maintain that information;
make the information available online in accordance with subsection (e)(5); and
take the action described in subsection (f) with respect to the information; and
in carrying out subparagraph (A), may not include in any record the name, specific address, telephone number, electronic mail address, or any other personally identifiable information of the applicant.
The information described in this paragraph shall include, with respect to an applicant who submits an application to a creditor in connection with a covered transaction—
the age of the applicant;
the race of the applicant;
the color of the applicant;
the sex of the applicant;
the marital status of the applicant;
the sexual orientation of the applicant; and
the gender identity of the applicant.
Right to refuse
An applicant with respect to a covered transaction may refuse to provide any information requested under paragraph (1) with respect to the covered transaction.
No access by underwriters
Where feasible, and subject to paragraph (2), no loan underwriter or other officer or employee of a creditor, or any affiliate of a creditor, involved in making any determination concerning an application with respect to a covered transaction may have access to any information provided by the applicant with respect to that covered transaction pursuant to a request for information under subsection (c)(1)(A)(i) in connection with that application.
If a creditor determines that a loan underwriter or other officer or employee of the creditor, or any affiliate of the creditor, involved in making any determination concerning an application with respect to a covered transaction should have access to any information provided by the applicant with respect to that covered transaction pursuant to a request for information under subsection (c)(1)(A)(i) in connection with that application, the creditor shall provide notice to the applicant—
regarding the access of the underwriter to that information; and
that the creditor may not discriminate on the basis of that information.
Prohibition on sharing information with third parties
Other than disclosures to the Bureau required by subsection (f), creditors may not share, exchange, transfer, sell, lease, rent, provide, disclose, or otherwise permit access to any third party the information provided by applicants pursuant to a request for information under subsection (c)(1)(A)(i).
The term third party means any person, partnership, or corporation that is not—
the person, partnership, or corporation that is sharing the information; and
solely performing an outsourced function of the creditor if the person, partnership, or corporation is contractually or legally prohibited from using, storing, or sharing the personal information after the conclusion of the outsourced function.
Disclosure of information to Bureau
Not later than March 1 of the year after a covered year for a creditor, the creditor shall submit to the Bureau all of the information that the creditor collected under clause (i) of subsection (c)(1)(A) and itemized under clause (iii) of that subsection during that covered year.
Each creditor that submits information to the Bureau under paragraph (1) shall retain a copy of that information in the records of the creditor for not less than 3 years after the date on which the creditor submits the information.
A creditor that collects information under subsection (c)(1)(A) may not—
share, exchange, transfer, sell, disclose, or otherwise permit access to that information except as provided in this subsection; or
use that information for any purpose, including for a purpose relating to marketing, except as provided in this subsection.
The Bureau shall make available a disclosure statement based on the information that each creditor submits for a covered year under paragraph (1), which—
the number of applications for covered transactions that the creditor received and approved during that covered year; and
the zip code and State of residence for each applicant with respect to an application for a covered transaction received by the creditor during that covered year; and
may not include any information described in subsection (c)(1)(B).
The Bureau shall—
post a general notice regarding the availability of the information received by the Bureau under paragraph (1);
in the notice posted under subparagraph (A), clearly convey that the information described in that subparagraph is available on the website of the Bureau; and
when making the information received under paragraph (1) available on the website of the Bureau, ensure that—
the information is easy for members of the public to access and understand; and
accessing and reading the information does not require the use of any advanced computer program or software.
Ensuring no discrimination
The Bureau shall examine the information submitted to the Bureau under subsection (e) or subparagraph (B), as applicable, to ensure that—
each creditor makes a decision regarding whether to approve an application for a covered transaction based on the internal requirements and policies of the creditor with respect to the extension of credit; and
no creditor with respect to a covered transaction discriminates against an applicant with respect to that covered transaction on the basis of any characteristic of the applicant described in subsection (c)(2).
Information from other government entities
For the purposes of subparagraph (A), the Bureau may rely on information that is collected by another Federal, State, or local government agency and submitted to the Bureau if the Director of the Bureau determines that—
relying on that information promotes transparency; and
the information collected by that other agency is substantially similar to the information that is submitted to the Bureau under subsection (e).
The Bureau may take such action as the Bureau determines to be necessary or appropriate to carry out paragraph (1)(A), including by—
imposing a civil penalty in an amount described in section 706(b) against a creditor that violates that paragraph; and
as appropriate, referring a matter to the Attorney General.
Rules of construction regarding bona fide errors
An error by a creditor in compiling or recording information, including an incorrect entry for a census tract number, may not be construed as a violation of this section if the error is unintentional and occurs despite the maintenance of procedures by the creditor that are reasonably adapted to avoid those errors.
Inaccurate or incomplete information
If a creditor, not later than 30 days after the end of each calendar quarter, makes a good faith effort to record all information required to be collected under clause (i) of subsection (c)(1)(A) and itemized under clause (iii) of that subsection during that quarter and some of that information is nevertheless inaccurate or incomplete, the error or omission, as applicable, may not be construed to violate this section if the creditor corrects or completes the information before submitting the information to the Bureau under subsection (e).
Not later than 1 year after the date of enactment of this section, and annually thereafter, the Bureau shall submit to Congress a report regarding the efforts of the Bureau in carrying out this section.
Technical and conforming amendment
The table of contents for the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is amended by inserting after the item relating to section 704B (15 U.S.C. 1691c–2) the following:
704C. Collection of demographic information.