79R1853 CLG-D
By: Ellis S.B. No. 1031
A BILL TO BE ENTITLED
AN ACT
relating to requiring the Office of Consumer Credit Commissioner to
conduct a study of certain mortgage lending practices or patterns.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. DEFINITIONS. In this Act:
(1) "Finance commission" means the Finance Commission
of Texas.
(2) "Office" means the Office of Consumer Credit
Commissioner.
SECTION 2. STUDY OF CERTAIN MORTGAGE LENDING PRACTICES OR
PATTERNS. (a) The office shall conduct a study to identify possible
discriminatory lending patterns or practices in the mortgage
lending industry. The study must determine whether there is
race-based or ethnicity-based disparity in mortgage loan denial or
approval rates when comparing applicants with similar income levels
and credit credentials and must also measure the relative size of
and changes over time in any identified disparity.
(b) In conducting the study, the office shall:
(1) collect from entities making mortgage loans data
about mortgage loans using the data formats of the Home Mortgage
Disclosure Act of 1975 (12 U.S.C. Section 2801 et seq.) and other
data fields necessary to identify possible discriminatory lending
patterns or practices;
(2) study and consider parameters that could be used
to consistently classify credit risk among mortgage loans for the
purpose of assessing possible discriminatory lending practices;
(3) for mortgage lenders with higher than average
non-approval rates for one or more racial or ethnic groups, examine
the extent to which withdrawals of mortgage loan applications by
each of those groups may have been the consequence of excessive
delay by lenders in processing the applications; and
(4) examine whether the marketing policies and
programs of entities making mortgage loans affirmatively reach out
to minority neighborhoods and communities.
SECTION 3. FILING OF CERTAIN LENDING INFORMATION. (a) As
determined by the finance commission under Subsection (b) of this
section, each mortgage lender in this state shall file with the
office:
(1) information on the guidelines and formulas used by
the lender to underwrite prospective borrowers' loans and any other
information relating to the underwriting of mortgage loans as
required by the office;
(2) information on the automated measures or models
used to underwrite loans; and
(3) any other information about mortgage loans
required by the office for purposes of the study.
(b) The finance commission shall determine:
(1) the type of information to be included in the
filing;
(2) the format in which the information is to be
submitted; and
(3) the date on which the filing is due.
SECTION 4. USE OF FILED INFORMATION. Information filed by a
mortgage lender with the office under this Act that is confidential
under a law that applied to the lender before the effective date of
this Act remains confidential and is not subject to disclosure
under Chapter 552, Government Code, except that the information may
be disclosed as provided by Section 552.008, Government Code,
relating to information for legislative purposes. The information
may not be released to the public except in summary form in the
report required under Section 6 of this Act.
SECTION 5. RULES. The finance commission shall adopt rules
to implement this Act.
SECTION 6. REPORT. The office shall prepare a report
detailing the findings and recommendations resulting from the study
conducted under this Act, and not later than December 1, 2006, shall
deliver the report to the lieutenant governor, the speaker of the
house of representatives, and the presiding officers of each of the
legislative committees with jurisdiction over lending entities.
SECTION 7. EXPIRATION DATE. This Act expires December 1,
2007.
SECTION 8. EFFECTIVE DATE. This Act takes effect
immediately if it receives a vote of two-thirds of all the members
elected to each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2005.