Several of the largest trade organizations in banking want to meet with Attorney General Jeff Sessions to discuss how the Trump administration’s approach to fair lending laws and if the current administration plans to enforce those laws any differently than the previous administration did.
In a letter sent recently to Sessions, the Mortgage Bankers Association, American Bankers Association, American Financial Services Association, Consumer Mortgage Coalition, and Independent Community Bankers of America ask to meet with Sessions at his “earliest convenience” to discuss fair lending enforcement moving forward.
The groups note that they took issue with the way that the Obama administration enforced fair lending laws, specifically the use of “disparate impact” as a pillar of its enforcement strategy.
A 2015 ruling by the Supreme Court established that the Fair Housing Act allows lawsuits based on disparate impact, meaning that a law or practice has a discriminatory effect even if it wasn’t based on a discriminatory purpose.
The groups state that they disagreed with some of the previous administration’s practices, and note that some recent actions by the Department of Justice imply that the Trump administration’s view of disparate impact could be similar to the Obama administration.
“We believe that this Administration has an opportunity to align fair lending policy with Supreme Court precedent and address constitutional concerns regarding the consideration of race in decision-making,” the groups write.
“Indeed, in a fair lending matter pending in the Northern District of Illinois, the Department recently espoused a concerning position of the previous Administration, which the Court then adopted,” the groups continue.
“Our members are committed to fair lending and expend substantial resources to ensure that credit decisions are based on a consumer’s qualifications for credit and without regard to factors such as race or national origin,” the groups add. “The civil rights team of the previous Administration, however, sought to use the rulemaking and enforcement process to establish novel and overreaching requirements that contradict Supreme Court precedent.”
The groups “appreciate” that the Trump administration is currently reviewing federal regulations and evaluating how to enforce those regulations, and ask that the DOJ move away from the Obama administration’s tactics.
“We appreciate that the process for reevaluating the previous Administration’s approach to fair lending should be deliberative and that your civil rights team is not yet in place,” the groups conclude. “We respectfully suggest, however, that the actions of the Department to date appear to further the prior Administration’s policy, and with other court deadlines fast approaching, we ask that you allow us to present our concerns to you before other decisions are made.”