The "Spitzer Effect" On Administrative Fair Lending Enforcement

Recent press releases by consumer advocates and state officials have indicated that these groups believe that the 2004 HMDA data will support claims of fair lending violations by mortgage lenders and other entities. Among other things, many consumer advocates and governmental entities have pointed out that data voluntarily released by mortgage lenders includes several troublesome elements, including evidence of a higher "incidence" of certain minorities receiving "reportable loans," as well as evidence that minorities receiving reportable loans may be disadvantaged in the APR received as compared to similarly situated non-minority individuals.¹

Notwithstanding these press reports, up until very recently the federal agencies responsible for the enforcement of the fair lending laws had maintained a neutral policy position, and in fact issued a joint press release that supports the view that the 2004 HMDA data will not—at least on a stand-alone-basis—support a claim of discriminatory