WASHINGTON — A conservative legal group founded by Stephen Miller, a top aide to President Donald Trump, is urging federal regulators to eliminate a longstanding requirement that mortgage lenders collect and report information on the race, sex and ethnicity of home-loan applicants.
America First Legal filed a formal petition in January with the Consumer Financial Protection Bureau asking the agency to rescind Regulation C, the component of the Home Mortgage Disclosure Act that mandates lenders gather and report demographic details about borrowers. The group also asked the White House’s Office of Information and Regulatory Affairs to withdraw approval of the rule under the Paperwork Reduction Act.
‘Moved Beyond Original Purpose’
In its petition, AFL is contending that the data collection requirement has moved beyond its original purpose of documenting lending patterns and now “functions as a surveillance and enforcement tool” that pressures lenders to make decisions based on race and sex rather than creditworthiness.
The petition further asserts that the rule runs afoul of recent U.S. Supreme Court precedent on race-based decision-making and conflicts with President Trump’s executive order promoting “colorblind” regulatory policies.
“The federal government has no business forcing Americans to disclose their race or sex as a condition of applying for a mortgage,” AFL President Gene Hamilton said in a statement. “Regulation C pressures lenders to sort borrowers by immutable characteristics and invites discrimination under the guise of ‘equity.’”
Supporters, Critics Respond
Supporters of maintaining the rule say demographic data are vital for identifying discriminatory practices such as redlining and ensuring compliance with federal fair-lending statutes, including the Equal Credit Opportunity Act and Fair Housing Act. Critics counter that the requirement fosters unnecessary government intrusion into personal information and could chill lending.
Regulation C traces its roots to the Home Mortgage Disclosure Act of 1975 and was substantially expanded under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
