Gregory Meeks: Redress Racial Disparities
Just before Congress left Washington for its Memorial Day recess, the House Financial Services Committee included an amendment by Queens, NY, Congressman Gregory W. Meeks aimed at redressing racial disparities in interest rates charged on home loans in new legislation designed to strengthen the regulation of government-sponsored enterprises (GSEs). The legislation (HR 1461) creates a new federal agency - the Federal Housing Finance Agency (FHFA) - that will oversee GSEs like Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, which provide equity to primary mortgage market lenders .
Now that Congress is back in session, Rep. Meeks is hopeful that HR 1461 with his amendment included will soon go to the full House for a floor vote.
His amendment would require Fannie Mae and Freddie Mac to disclose to their new regulator any disparities in interest rates charged to minority and non-minority home buyers with similar credit ratings.
It will require the lending institution covered under the act to disclose information to the Federal Housing Finance Agency which will allow the director of the new agency to assess if disparities exist in interest rates charged on mortgages to minority borrowers as compared with non-minority borrowers.
Congressman Meeks noted that, “the inclusion of my amendment in the overall GSE legislation shows that there are areas in which bipartisan cooperation is possible to ensure basic fairness in mortgage lending markets. I was able to convince my colleagues on both sides of the aisle that mortgage lending equities ranging from predatory lending to near-usurious lending rates to the much more common but no less discriminatory racial differentials in interest rates granted to minority and non-minority home buyers should not go without legislative remedy.
The new GSE legislation is a perfect institution to put in place a regulatory mechanism that can redress this problem.”