Title: Protections in Consumer Lending Act
Policy area: Finance and Financial Sector

Summary:
Protections in Consumer Lending Act
This bill requires creditors to collect specified demographic information regarding applicants for certain credit transactions (e.g., automobile loans, credit cards, and payday loans) and the outcomes of these applications. The creditor must report this information to the Consumer Financial Protection Bureau (CFPB).
The CFPB must use this information to determine whether a creditor is engaging in discriminatory practices and may take enforcement action.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1205 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 1205

   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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 11, 2019

    Mrs. Gillibrand (for herself, Ms. Klobuchar, Mr. Wyden, and Mr. 
  Blumenthal) introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protections in Consumer Lending 
Act''.

SEC. 2. COLLECTION OF DEMOGRAPHIC INFORMATION.

    (a) In General.--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:

``SEC. 704C. COLLECTION OF DEMOGRAPHIC INFORMATION.

    ``(a) Definitions.--In this section--
            ``(1) the terms `annual percentage rate' and `interest' 
        have the meanings given those terms in section 987(i) of title 
        10, United States Code;
            ``(2) the term `covered transaction' means--
                    ``(A) the extension of credit with respect to the 
                purchase of a motor vehicle;
                    ``(B) the extension of credit with respect to which 
                the annual percentage rate of interest imposed is 
                greater than 36 percent;
                    ``(C) the extension of credit--
                            ``(i) in an amount that is less than 
                        $15,000; or
                            ``(ii) with respect to which the period of 
                        repayment is less than 3 years; and
                    ``(D) the opening of a credit card account; and
            ``(3) the term `covered year' means a year in which a 
        creditor engages in a covered transaction.
    ``(b) Purpose; Sense of Congress.--
            ``(1) Purpose.--The purpose of this section is to provide 
        the Bureau and the public with data that can be used to--
                    ``(A) help determine whether creditors are serving 
                the credit-lending needs of the communities in which 
                the creditors are located; and
                    ``(B) assist in--
                            ``(i) identifying possible discriminatory 
                        lending patterns; and
                            ``(ii) enforcing antidiscrimination 
                        statutes, including this title.
            ``(2) 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.
    ``(c) Collection of Information.--
            ``(1) In general.--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--
                    ``(A) shall--
                            ``(i) request from the applicant the 
                        information described in paragraph (2) with 
                        respect to the applicant;
                            ``(ii) when collecting information under 
                        clause (i), provide a disclaimer to the 
                        applicant regarding--
                                    ``(I) the purposes of the 
                                collection of the information; and
                                    ``(II) the right of the applicant 
                                under paragraph (3);
                            ``(iii) itemize the information with 
                        respect to the application, including any 
                        information collected under clause (i), in 
                        order to clearly and conspicuously disclose--
                                    ``(I) the number of the application 
                                and the date on which the application 
                                was received;
                                    ``(II) the type and purpose of the 
                                covered transaction;
                                    ``(III) the amount of the credit or 
                                credit limit applied for with respect 
                                to the covered transaction;
                                    ``(IV) if applicable, the amount of 
                                the credit or credit limit approved for 
                                the applicant with respect to the 
                                covered transaction;
                                    ``(V) 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;
                                    ``(VI) the originator of the 
                                covered transaction;
                                    ``(VII) the credit score and debt 
                                to income ratio of the applicant;
                                    ``(VIII) if the covered transaction 
                                is a loan, whether or not the loan is 
                                amortizing; and
                                    ``(IX) any additional data that the 
                                Bureau determines would aid in 
                                fulfilling the purposes of this 
                                section; and
                            ``(iv) in accordance with subsection (e), 
                        submit any information collected under clause 
                        (i) and the information itemized under clause 
                        (iii) to the Bureau, which shall--
                                    ``(I) store and maintain that 
                                information;
                                    ``(II) make the information 
                                available online in accordance with 
                                subsection (e)(5); and
                                    ``(III) take the action described 
                                in subsection (f) with respect to the 
                                information; and
                    ``(B) 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.
            ``(2) Information described.--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--
                    ``(A) the age of the applicant;
                    ``(B) the race of the applicant;
                    ``(C) the color of the applicant;
                    ``(D) the sex of the applicant;
                    ``(E) the marital status of the applicant;
                    ``(F) the sexual orientation of the applicant; and
                    ``(G) the gender identity of the applicant.
            ``(3) 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.
    ``(d) No Access by Underwriters.--
            ``(1) Limitation.--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.
            ``(2) Limited access.--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--
                    ``(A) regarding the access of the underwriter to 
                that information; and
                    ``(B) that the creditor may not discriminate on the 
                basis of that information.
    ``(e) Disclosure of Information to Bureau.--
            ``(1) In general.--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.
            ``(2) Information retained.--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.
            ``(3) Prohibition.--A creditor that collects information 
        under subsection (c)(1)(A) may not--
                    ``(A) share, exchange, transfer, sell, disclose, or 
                otherwise permit access to that information except as 
                provided in this subsection; or
                    ``(B) use that information for any purpose, 
                including for a purpose relating to marketing, except 
                as provided in this subsection.
            ``(4) Disclosure statement.--The Bureau shall make 
        available a disclosure statement based on the information that 
        each creditor submits for a covered year under paragraph (1), 
        which--
                    ``(A) shall include--
                            ``(i) the number of applications for 
                        covered transactions that the creditor received 
                        and approved during that covered year; and
                            ``(ii) 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
                    ``(B) may not include any information described in 
                subsection (c)(1)(B).
            ``(5) Online disclosure.--The Bureau shall--
                    ``(A) post a general notice regarding the 
                availability of the information received by the Bureau 
                under paragraph (1);
                    ``(B) 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
                    ``(C) when making the information received under 
                paragraph (1) available on the website of the Bureau, 
                ensure that--
                            ``(i) the information is easy for members 
                        of the public to access and understand; and
                            ``(ii) accessing and reading the 
                        information does not require the use of any 
                        advanced computer program or software.
    ``(f) Bureau Action.--
            ``(1) Ensuring no discrimination.--
                    ``(A) In general.--The Bureau shall examine the 
                information submitted to the Bureau under subsection 
                (e) or subparagraph (B), as applicable, to ensure 
                that--
                            ``(i) 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
                            ``(ii) 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).
                    ``(B) 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--
                            ``(i) relying on that information promotes 
                        transparency; and
                            ``(ii) the information collected by that 
                        other agency is substantially similar to the 
                        information that is submitted to the Bureau 
                        under subsection (e).
            ``(2) Enforcement.--
                    ``(A) In general.--The Bureau may take such action 
                as the Bureau determines to be necessary or appropriate 
                to carry out paragraph (1)(A), including by--
                            ``(i) imposing a civil penalty in an amount 
                        described in section 706(b) against a creditor 
                        that violates that paragraph; and
                            ``(ii) as appropriate, referring a matter 
                        to the Attorney General.
                    ``(B) Rules of construction regarding bona fide 
                errors.--
                            ``(i) Unintentional 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.
                            ``(ii) 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).
    ``(g) Reporting Requirement.--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.''.
    (b) 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.''.
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