New York City Public Advocate Jumaane D. Williams advanced legislation in the City Council which would prohibit discrimination in issuing credit and mandate transparency in the process. In a hearing of the Committees on Consumer and Worker Protection and Civil and Human Rights today, he argued the bill would protect against the kind of discrimination which has pervaded lending practices for decades.
“Currently, there are federal laws such as the Truth in Lending Act and the Equal Credit Opportunity Act that provide safeguards for consumers in their dealings with lenders and creditors,” said Public Advocate Williams. “The city should enact similar policies at the local level that fortify existing consumer protection laws.”
Specifically, the Public Advocate’s legislation, Intro 401, would prohibit discrimination based on an individual’s membership in a protected class in the issuance of credit and would require creditors to disclose to potential borrowers how their rate is calculated. It would deem it an unlawful discriminatory practice for any creditor or any officer, agent or employee to discriminate in the granting, withholding, extending or renewing of any form of credit on the basis of an applicant’s race, creed, religion, national origin, sexual orientation, age, gender, and disability, among other classifications.
The bill was originally introduced in 2016, following a $24 million settlement with Honda alleging that Honda creditors engaged in a pattern or practice of discrimination. In the decade since, the problem has persisted, including a similar settlement with Citigroup in 2023 and ongoing suits against Wells Fargo and other lenders.
“Intro 401 could help hundreds of thousands of people applying for mortgages, small business loans, and other types of credit,” argued the Public Advocate. “Having in place a law that mandates transparency in how a person’s interest rate is calculated will also protect groups of people in this city that face historical discrimination and unfair treatment when it comes to banking, homeownership, and accessing financial opportunities.”
Read the Public Advocate’s full statement to the committee below, and the text of Intro 401 here.
STATEMENT OF PUBLIC ADVOCATE JUMAANE D. WILLIAMS TO THE
NEW YORK CITY COUNCIL COMMITTEE ON CONSUMER AND WORKER PROTECTION A COMMITTEE ON CIVIL AND HUMAN RIGHTS
FEBRUARY 29, 2024
Good morning,
My name is Jumaane D. Williams and I am the Public Advocate for the City of New York. I would like to thank Chairs Menin, Williams, and members of the Committees on Consumer and Worker Protection, and Civil and Human Rights for holding this hearing.
Today, I will be speaking on Introduction 0401-2024, of which I am the prime sponsor. The bill would prohibit discrimination based on an individual’s membership in a protected class in the issuance of credit and would require creditors to disclose to potential borrowers how their rate is calculated. More specifically, the bill would deem it an unlawful discriminatory practice for any creditor or any officer, agent or employee to discriminate in the granting, withholding, extending or renewing of any form of credit on the basis of an applicant’s race, creed, religion, national origin, sexual orientation, age, gender, and disability, among other classifications.
I first introduced this bill during my tenure as a councilmember in 2016. The bill’s original introduction in 2016 was inspired by a $24 million settlement alleging that Honda creditors “engaged in a pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in auto lending.” It has been nearly ten years since the bill was introduced, and the need for it still remains. In 2023, Citigroup settled for $26 million for claims that its employees denied Armenian-Americans fair access to Citigroup credit cards. Mortgage lenders such as Wells Fargo and Navy Federal Credit Union also faced heightened scrutiny and lawsuits on their lending practices and pricing disparities, notably between Black and Latino homeowners and white homeowners. I met with Wells Fargo myself shortly before the news broke, and they vehemently tried to suggest this was not the case, while it was really clear that it is.
Currently, there are federal laws such as the Truth in Lending Act and the Equal Credit Opportunity Act that provide safeguards for consumers in their dealings with lenders and creditors. The city should enact similar policies at the local level that fortify existing consumer protection laws. Int. 0401-2024 could help hundreds of thousands of people applying for mortgages, small business loans, and other types of credit. Having in place a law that mandates transparency in how a person’s interest rate is calculated will also protect groups of people in this city that face historical discrimination and unfair treatment when it comes to banking, homeownership, and accessing financial opportunities. I urge my colleagues to sign onto this bill and hope for its subsequent passage.
Thank you.
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