I 
111TH CONGRESS 
2D SESSION 
H. R. 5941 
To reduce fraud and abusive practices in the origination of residential mort-
gages by establishing a clearinghouse of mortgage application informa-
tion. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 29, 2010 
Mr. TOWNS introduced the following bill; which was referred to the Committee 
on Financial Services 
A BILL 
To reduce fraud and abusive practices in the origination 
of residential mortgages by establishing a clearinghouse 
of mortgage application information. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Anti-Redlining and 
Anti-Mortgage Fraud Act of 2010’’. 
SEC. 2. RESIDENTIAL MORTGAGE APPLICATION RECORDA-
TION REQUIREMENT. 
(a) RECORDATION REQUIREMENT.—It shall be un-
lawful for any person or entity to extend credit (including 
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in connection with a lease-purchase transaction), or to 
provide funds or collect any payments in connection with 
such an extension of credit, that is secured by a single- 
family residence unless the originator has recorded the ap-
plicant’s application for such extension of credit with the 
clearinghouse established under subsection (b). The Sec-
retary of the Treasury shall, by regulation, require origi-
nators to record each application to enter into a trans-
action covered by this subsection with the clearinghouse 
established under subsection (b), at the time that applica-
tion is first received by the originator. 
(b) MORTGAGE APPLICATION RECORDATION SYS-
TEM.— 
(1) ESTABLISHMENT.—The Secretary of the 
Treasury, acting through the Director of FinCEN, 
shall establish a system in accordance with this sub-
section to record applications for extensions of credit 
that are subject to the requirement under subsection 
(a), which shall include the establishment of a clear-
inghouse (in this section referred to as the ‘‘clearing-
house’’) for recording all such applications. 
(2) CLEARINGHOUSE
OPERATOR.—The clear-
inghouse shall be established and managed by a pri-
vate sector entity selected, in accordance with stand-
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ards established by the Secretary, from applicants 
that— 
(A) demonstrate the capacity to operate 
the clearinghouse in accordance with this sec-
tion and provide technology sufficient to carry 
out all functions and activities of the clearing-
house; 
(B) meet such standards, as the Secretary 
shall establish, to ensure that the clearinghouse 
operator is independent of ownership of, by, or 
with, and affiliation of any kind with, any enti-
ty that is engaged in the business of origi-
nating, funding, guaranteeing, purchasing, sell-
ing, securitizing, or assuming any risk related 
to residential mortgages other than from the 
operation of the clearinghouse; and 
(C) are small business concerns, as such 
term is defined pursuant to section 3 of the 
Small Business Act (15 U.S.C. 632). 
(3) COSTS.— 
(A) RESPONSIBILITY.—All costs of the es-
tablishment and operation of the clearinghouse 
shall be borne by the clearinghouse operator. 
(B) FEES.— 
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(i) AUTHORITY.—The clearinghouse 
operator may assess and collect fees to 
cover the costs of the establishment and 
operation of the clearinghouse established 
under this subsection. 
(ii) LIMITATION.—Such fees may be 
assessed and collected only in such manner 
as may reasonably be expected to result in 
an aggregate amount of fees collected that 
does not exceed the aggregate amount of 
the costs for establishment and operation 
of the clearinghouse, plus a market rate of 
return on the investment in establishing 
and operating costs of the clearinghouse, 
as determined by the Secretary. 
(iii) PERSONS
SUBJECT
TO
FEES.— 
Fees under this subparagraph shall be as-
sessed against and collected from origina-
tors, for each application for an extension 
of credit that is required to be recorded 
with the clearinghouse. 
(C) GUARANTEE.—The Secretary may 
guarantee repayment of principal and interest 
on a loan to the clearinghouse operator in an 
amount sufficient to cover the costs of estab-
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lishing, and operating, the clearinghouse estab-
lished under this section and there is authorized 
to be appropriated such sums as may be nec-
essary for costs (as such term is defined in sec-
tion 502 of the Federal Credit Reform Act of 
1990 (2 U.S.C. 661a)) of such guarantee. 
(c) COLLECTION OF INFORMATION.—For each appli-
cation for an extension of credit recorded with the clear-
inghouse, the clearinghouse shall, through an internet- 
based electronic system— 
(1) provide a unique identifier that shall be per-
manently assigned to the application; and 
(2) collect and maintain— 
(A) the name, social security number, and 
address of each applicant and co-applicant; 
(B) the address of the property or prop-
erties that provide security for the extension of 
credit for which the application is filed; 
(C) the identity of the legal entity receiving 
the application and the identity of the agent or 
employee of that entity actually taking the ap-
plication; 
(D) the identity of any entity or individual 
that enters any information into the clearing-
house system with respect to an application; 
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(E) identification of whether property se-
curing the extension of credit is a principal resi-
dence, an additional residence, or an investment 
property; 
(F) identification of whether the extension 
of credit was secured by a first or subsequent 
lien on property and whether it was made for 
purchase, refinance, a home equity loan or line 
of credit, construction finance, home equity con-
version, or lease-purchase, or such other cat-
egory as the Secretary may provide; 
(G) the name of each lender to which the 
application is submitted; 
(H) the name of each lender that accepts 
the application; 
(I) the date and type of transaction that 
results from the approval of the application or 
the date of termination of the application; and 
(J) such other information as the Sec-
retary may, by regulation, require that is con-
sistent with the fraud prevention and detection 
purposes of the clearinghouse. 
(d) USE AND PROTECTION OF INFORMATION.— 
(1) IN GENERAL.—All information collected by 
the clearinghouse shall be the property of the Sec-
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retary and access to and use of the information shall 
be limited as prescribed in this section and regula-
tions issued under this section by the Secretary. 
(2) DISCLOSURES TO APPLICANTS.—The Sec-
retary shall require each originator accepting appli-
cations for extensions of credit subject to the re-
quirement under subsection (a) to provide to each 
applicant, at the time of application, a written dis-
closure, in such form and containing such informa-
tion as the Secretary shall require, sufficient to in-
form the applicant of the existence and purpose of 
the clearinghouse, the information regarding the ap-
plication to be collected by the clearinghouse, who 
has access to such information collected by the clear-
inghouse, and the manner in which the information 
may be used. 
(3) ACCESS.—Access to information collected 
by the clearinghouse shall be limited as follows: 
(A) An individual or entity that accepts 
applications for extensions of credit shall have 
access solely to information that was submitted 
to the clearinghouse by that individual or enti-
ty. 
(B) An entity that considers an extension 
of credit based upon an application shall have 
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access solely to information associated with ap-
plications submitted to such entity and to other 
currently or recently active applications involv-
ing the same applicants or co-applicants or the 
same property or properties. 
(C) A prospective purchaser or guarantor 
of any instrument related to an extension of 
credit for which application information was 
collected by the clearinghouse shall have access 
to the same information as the entity that ex-
tended the credit. 
(D) The Secretary and any other Federal 
and State regulatory or law enforcement agen-
cies shall have access to all data collected by 
the clearinghouse to the extent and in the man-
ner prescribed by the Secretary for the purpose 
of investigating fraudulent, discriminatory, or 
predatory activities and other activities that are 
potential violations of Federal or State law. 
(4) PROTECTION OF INFORMATION.—The Sec-
retary shall, by regulation pursuant to subsection 
(e), provide for the operation of the clearinghouse 
and establish guidelines and procedures necessary to 
ensure that the clearinghouse operates in a secure 
manner that protects the information collected from 
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unauthorized access or misuse by any individual or 
entity. 
(e) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) APPLICATION.—The term ‘‘application’’ 
means, any writing whether or not in paper or elec-
tronic form and whether or not signed by the appli-
cant, that— 
(A) is prepared or received by an origi-
nator; 
(B) is submitted or is intended to be sub-
mitted for consideration by any creditor for an 
extension of credit to be secured by a single- 
family residence; and 
(C) identifies the applicant and the secu-
rity property. 
(2) CREDIT; 
EXTENSION
OF
CREDIT.—The 
terms ‘‘credit’’ and ‘‘extension of credit’’ mean the 
provision of time for payment pursuant to contrac-
tual terms, including lease-purchase contracts, home 
equity lines of credit, and home equity conversion 
transactions. 
(3) FINCEN.—The term ‘‘FinCEN’’ means the 
Financial Crimes Enforcement Network of the De-
partment of the Treasury. 
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(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury, acting through the 
Director of FinCEN. 
(5) SINGLE
FAMILY
RESIDENCE.—The term 
‘‘single-family residence’’ means residential real 
property that contains one to four dwelling units, or 
individual units of condominiums or cooperatives. 
(6) 
ORIGINATOR.—The 
term 
‘‘originator’’ 
means any entity that is in the business of receiving 
applications for extensions of credit. 
(f) REGULATIONS.—The Secretary shall issue any 
regulations necessary to carry out this section. 
(g) EFFECTIVE DATE.—The provisions of this sec-
tion shall take effect with respect to extensions of credit 
entered into on and after January 1, 2011. 
(h) CONFORMING AMENDMENT.—Paragraph (2) of 
section 310 of title 31, United States Code, is amended— 
(1) by redesignating subparagraph (J) as sub-
paragraph (K); and 
(2) by inserting after subparagraph (I) the fol-
lowing new subparagraph: 
‘‘(J) Carry out the responsibilities of the Sec-
retary under section 2 of the Anti-Redlining and 
Anti-Mortgage Fraud Act of 2010 (relating to resi-
dential mortgage application recordation require-
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ment and establishment of a clearinghouse for such 
recording).’’. 
Æ 
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