IV 

110TH CONGRESS 

2D SESSION H. CON. RES. 391 

Recognizing the disparities that are associated with predatory lending abuses 

in minority communities and expressing the sense of the Congress that 

as new abuses continue to emerge, such laws should ensure that all 

those responsible for representing and protecting families have the authority to act to address these new problems. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 17, 2008 

Ms. CLARKE (for herself and Mr. TOWNS) submitted the following concurrent 

resolution; which was referred to the Committee on Financial Services 

CONCURRENT RESOLUTION 

Recognizing the disparities that are associated with predatory 

lending abuses in minority communities and expressing 

the sense of the Congress that as new abuses continue 

to emerge, such laws should ensure that all those responsible for representing and protecting families have the 

authority to act to address these new problems. 

Whereas minorities have a long history of rejection by primerate lenders; 

Whereas subprime mortgages are typically offered to borrowers who do not meet the credit standards for borrowing in the prime market and these loans cater to people with blemished credit records or little experience with 

debt; 


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•HCON 391 IH 

Whereas inadequate attention has been paid to the concentration of these mortgages in neighborhoods that are largely 

African-American, Latino, or both; 

Whereas some of the biggest lenders in minority neighborhoods are mortgage companies that provide only 

subprime mortgages, not full-service banks that do a 

range of lending; 

Whereas a 2006 study by the Center for Responsible Lending 

(CRL), a nonprofit home ownership research group, concludes that African-Americans and Latinos are more likely to be steered into high-risk subprime mortgages; 

Whereas advocacy groups say poor and minority borrowers 

who qualify for traditional mortgages are frequently nevertheless steered into mortgages that reset automatically 

to much higher interest rates after a short ‘‘teaser’’ period resulting in payment increases of hundreds of dollars 

each month; 

Whereas these subprime mortgages are characterized by low 

‘‘introductory’’ interest rates, usually for the first 2 or 3 

years and these rates frequently rise rapidly in subsequent years; 

Whereas African-Americans and Latinos are getting charged 

for more expensive mortgage loans than White borrowers, 

even when they have equal credit histories; 

Whereas a nonprofit organization dedicated to eliminating 

abusive financial practices examined 50,000 mortgages 

and discovered that the two minority groups were almost 

a third more likely to pay more for a loan than similarly 

situated White borrowers; 


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•HCON 391 IH 

Whereas the Center for Community Change reports that African-American and Latino borrowers are more likely to 

recieve subprime loans than White borrowers; 

Whereas Harvard Law School Professor Howell Jackson has 

conducted research demonstrating racial disparities in 

loan costs due to yield-spread premiums; 

Whereas Professor Jackson’s research has concluded that African-Americans pay an additional up front charge averaging $474 per loan, while Latinos pay an average additional $580 per loan on average; 

Whereas other causes of pricing disparities may include the 

inconsistent application of objective pricing criteria, targeting of families of color by higher rate lenders or brokers, and lack of investment by lower cost lenders in minority communities; 

Whereas information from the United States Federal Reserve 

demonstrates that African-Americans are 3.2 times more 

likely to receive a subprime loan than White borrowers; 

Whereas in 2007, the number of homeowners defaulting on 

subprime mortgages began to soar; 

Whereas it is estimated that as many as 2,200,000 households are at risk of defaulting on their subprime loans 

and losing their homes; 

Whereas minorities are facing foreclosure or losing their 

homes disproportionately; and 

Whereas Latino civil rights organizations say that this discrimination affects the large wave of first-time and firstgeneration Latino home buyers who are showing up in 

the housing market: Now, therefore, be it 


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•HCON 391 IH 

1 Resolved by the House of Representatives (the Senate 

2 concurring), That the Congress— 

3 (1) recognizes that for most types of subprime 

4 mortgages, borrowers of color are more likely to re5 ceive higher rate loans and there are many factors 

6 that have played roles in making these mortgages 

7 more costly to these borrowers; 

8 (2) encourages fair pricing of home mortgages 

9 that is based only on legitimate risk factors and fa10 cilitates economic progress for all borrowers; 

11 (3) encourages lenders to eliminate discre12 tionary pricing in the subprime mortgage market 

13 and prompts them to adopt transparent, market14 driven prices for mortgages representing similar 

15 risks; 

16 (4) encourages more transparency by— 

17 (A) addressing yield-spread premiums in 

18 laws designed to protect homeowners from abu19 sive lending practices; 

20 (B) prohibiting yield-spread premiums 

21 subprime and nontraditional home loans; 

22 (C) improving transparency of yield-spread 

23 premiums by requiring brokers to explain to ap24 plicants what the rate, payment, and fees on 


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1 the loan could be with and without the yield2 spread premium; 

3 (D) following the trends of the securities 

4 industry, holding lenders and brokers respon5 sible for providing loans that are suitable for a 

6 given borrower; and 

7 (E) prohibiting prepayment penalties in 

8 subprime loans; 

9 (5) encourages preventing pricing discrimina10 tion by requiring subprime lenders to disclose more 

11 detailed pricing and underwriting information in 

12 their Home Mortgage Disclosure Act data; 

13 (6) encourages regulators to report annually on 

14 the number of fair lending examinations performed 

15 and for each examination provide publicly available 

16 information, including— 

17 (A) identifying the indicators of potential 

18 discriminatory activity, if any; and 

19 (B) identifying the protected class or class20 es believed to be potentially disadvantaged by 

21 such activity, and the outcome of each review; 

22 (7) encourages public and private partnerships 

23 to ensure responsible investments are made in un24 derserved communities; 


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1 (8) recognizes that policymakers should review 

2 whether lower cost lenders need additional incentives 

3 to help meet the credit needs of communities of 

4 color; 

5 (9) upholds the laws and regulations that pro6 hibit predatory, irresponsible subprime lending and 

7 have proven effective in reducing the number of abu8 sive loans while maintaining a vibrant market for 

9 subprime home loans; 

10 (10) urges policymakers to endorse legislation 

11 that builds on the proven methods for protecting 

12 families from abusive lending while retaining access 

13 to subprime credit; and 

14 (11) urges policy makers to oppose pre-emption 

15 of State and local laws designed to protect home16 owners. 

Æ 


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