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GAO study sought on fair lending laws
WASHINGTON(4/14/08)—Sixteen Democrats on the House Financial Services Committee, including Chairman Barney Frank of Massachusetts, sent a request to the Government Accountability Office seeking a study on fair lending laws. In their letter to GAO Acting Comptroller General Gene Dodaro, the House lawmakers specifically asked Congress’ investigative arm for a comprehensive review of the current state of the federal enforcement of the Equal Credit Opportunity Act (ECOA), the Home Mortgage Disclosure Act (HMDA) and the Fair Housing Act (FHA), and other related fair lending laws. The review is to assess the monitoring and enforcement efforts of the Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, Department of Justice, and Department of Housing and Urban Development. The House members also asked the GAO to review how shortcomings regarding the data collected under current law might be overcome. “We are troubled that HMDA data continue to reveal significant racial and ethnic disparities in mortgage lending, particularly in the incidence of higher-priced lending to minorities,” the congressmen wrote. However, they said that because current HMDA data lack key variables involved in the underwriting process--such as borrowers’ credit history, debt-to-income ratio, and loan-to-property value--HMDA data alone cannot be used to determine whether lenders are violating fair lending laws. For more details on the lawmakers’ request to GAO, use the resource link below.
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