reporting the race of borrowers on loan modification applications is difficult because many borrowers decline to state it. In such cases, loan officers have typically been required to fill in the box themselves based on the appearance of the borrower and his surname.
“We already have exaggerated claims of discrimination,” he said. “We wouldn’t want to make it worse.”
Officials who presided over the hearing seemed receptive to the consumer advocates ideas, but expressed concern about violating the privacy of borrowers who would rather keep their financial information secret.
If the consumer groups requests were granted, “somebody could look at this HMDA data and see where a person lived, what their race and age was, what their credit score was, [and] whether they were late on their mortgage payments,” said Sandra Braunstein, director of the Federal Reserve’s Division of Consumer and Community Affairs.
“If you were on that list, would you want the whole world to know?” she said.
But consumer groups countered that most of that sensitive information is already available to bankers and for-profit marketers.
“The real question,” said Orson Aguilar of the Greenlining Institute, “is why the private sector has access to this information but the public does not.”
The July 29th hearing was the second in a series of four gatherings hosted by the Federal Reserve on whether to adopt new rules under the Home Mortgage Disclosure Act. The first one occurred last month in Atlanta, and the next two are scheduled for September in Chicago and Washington, D.C.