PRINTER'S NO. 432
No. 410 Session of 1979
INTRODUCED BY RICHARDSON, WHITE, RHODES, HARPER, WILLIAMS,
J. J. JOHNSON, SALVATORE, STEWART, MICHLOVIC, MURPHY,
SEVENTY, TRELLO, DAWIDA, KUKOVICH, EARLEY AND COHEN,
FEBRUARY 20, 1979
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE,
FEBRUARY 21, 1979
AN ACT
1 To prohibit discrimination in mortgage lending, and to require
2 depository institutions to report certain information
3 regarding mortgage loans to the Secretary of Banking and to
4 the public.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Findings and purpose.
8 The General Assembly finds that depository institutions have
9 failed to provide adequate home financing on a nondiscriminatory
10 basis for all neighborhoods within the communities from which
11 they receive deposits. The purpose of this act is to provide the
12 citizens and public officials of the Commonwealth of
13 Pennsylvania with sufficient information to enable them to
14 determine which depository institutions are fulfilling their
15 obligations to serve the housing needs of the communities and
16 neighborhoods in which they are located.
17 Section 2. Definitions.
1 The following words and phrases when used in this act shall
2 have, unless the context clearly indicates otherwise, the
3 meanings given to them in this section:
4 "Applicant." A person who files with a depository
5 institution a written request containing such information as
6 required by the depository institution for a mortgage loan.
7 "Depository institution." Any State chartered bank, savings
8 bank, savings and loan association or credit union.
9 "Mortgage loan." A loan which is secured by residential real
10 property or a home improvement loan.
11 Section 3. Prohibition.
12 A depository institution shall not discriminate, on a basis
13 that is arbitrary or unsupported by a reasonable analysis of the
14 lending risks associated with the applicant for a given loan or
15 the condition of the property to secure it, in the granting,
16 withholding, extending, modifying or renewing or in the fixing
17 of the rates, terms, conditions or provisions of any mortgage
18 loan on real property located in the municipality in which a
19 depository institution has a home or branch office or in any
20 municipality contiguous to such municipality, merely because
21 such property is located in a specific neighborhood or
22 geographical area. It shall not be a violation of this section
23 if the mortgage loan is made pursuant to a specific public or
24 private program, the purpose of which is to increase the
25 availability of mortgage loans within a specific neighborhood or
26 geographical area.
27 Section 4. Information available.
28 Each depository institution which has a home office or branch
29 office located within a standard metropolitan statistical area
30 as defined by the Secretary of Banking consistent with the
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1 definition used by the Federal Office of Management and Budget,
2 shall compile and make available to the public for inspection
3 and copying at the home office and at least one branch office
4 within each standard metropolitan statistical area in which the
5 depository institution has an office, in accordance with
6 regulations promulgated by the Secretary of Banking:
7 (1) The number and total dollar amount of mortgage loans
8 which were originated or purchased by that institution during
9 each fiscal year, beginning with the last full fiscal year of
10 that institution which immediately preceded the effective
11 date of this act.
12 (2) The number and dollar amount of each such loan by
13 census tract, where readily available at a reasonable cost,
14 as determined by the Secretary of Banking, otherwise by ZIP
15 code, for mortgage loans secured by property located within
16 that standard metropolitan statistical area.
17 (3) The number and dollar amount of all such mortgage
18 loans secured by property located outside such standard
19 metropolitan statistical area.
20 (4) The number and dollar amount of loans which are
21 insured under Title II of the National Housing Act or under
22 Title V of the Housing Act of 1949 or which are guaranteed
23 under Chapter 37 of Title 38, United States Code.
24 (5) The number and dollar amount of loans made to
25 mortgagors who did not, at the time of execution of the
26 mortgage, intend to reside in the property securing the
27 mortgage loan.
28 (6) The number and dollar amount of home improvement
29 loans.
30 (7) The number and dollar amount of all applications for
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1 mortgage loans, by census tract or ZIP code as required by
2 paragraph (2).
3 (8) The regulations promulgated by the Secretary of
4 Banking shall be consistent with the terms and provisions of,
5 and regulations promulgated pursuant to the "Home Mortgage
6 Disclosure Act of 1975," Public Law 94-200, and compliance
7 with the provisions of section 304 thereof shall constitute
8 compliance with this section.
9 Section 5. Additional requirement.
10 A depository institution which maintains offices in more than
11 one standard metropolitan statistical area shall make the
12 information required by section 4 available at any such office
13 only to the extent that such information relates to mortgage
14 loans which were originated or purchased by an office of that
15 depository institution located in the standard metropolitan
16 statistical area in which the office making such information
17 available is located.
18 Section 6. Preservation of information.
19 Information required to be compiled and made available under
20 this act shall be maintained and made available for a period of
21 five years after the close of the first year during which such
22 information is required to be maintained and made available. A
23 copy shall be filed annually with the Secretary of Banking.
24 Section 7. Right of injured.
25 A person or applicant who has been discriminated against as a
26 result of a violation of section 3 may bring an action in
27 Pennsylvania in a court of competent jurisdiction. Upon finding
28 that a depository institution is in violation of this act, the
29 court may award actual damages, reasonable attorneys' fees and
30 court costs.
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1 Section 8. Subpoena power.
2 The Secretary of Banking shall have the power to make such
3 investigations into any matter pertaining to this act as he
4 shall deem necessary, including the power to hold hearings,
5 issue subpoenas to compel the attendance of witnesses and the
6 production of documents, papers, books, records and other
7 evidence before him. In case of a failure of any person to
8 comply with any subpoena issued by the secretary or to testify
9 to any matter concerning which he may be lawfully interrogated,
10 a court of competent jurisdiction on application of the
11 secretary may issue an order requiring the attendance of such
12 person and the giving of testimony or production of evidence. A
13 person who fails to obey the order of the court may be punished
14 for contempt.
15 Section 9. Power of the Secretary of Banking.
16 If the Secretary of Banking finds that a depository
17 institution is violating the provisions of this act, he shall
18 order the institution to cease its unlawful practices. Such
19 order shall be subject to appellate review.
20 Section 10. Penalty.
21 A depository institution which continues to violate the
22 provisions of this act after having been ordered by the
23 secretary to cease such practices shall be liable to a penalty
24 of $5,000 for each offense to be recovered with costs by the
25 Commonwealth in any court of competent jurisdiction in a civil
26 action prosecuted by the Attorney General. The penalty provided
27 by this section shall be in addition to and not in lieu of any
28 other provision of law applicable upon a depository
29 institution's failure to comply with an order of the Secretary
30 of Banking.
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1 Section 11. Promulgation of regulations.
2 The Secretary of Banking is authorized and empowered to
3 promulgate such regulations as he may deem necessary, consistent
4 with sound banking practice, for the proper operation and
5 enforcement of this act.
6 Section 12. Effective date.
7 This act shall take effect in 60 days.
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