PRINTER'S NO. 572
No. 545 Session of 1981
INTRODUCED BY RICHARDSON, OLIVER, RAPPAPORT, DEAL, EVANS,
J. D. WILLIAMS, WIGGINS, RIEGER AND LEVIN, FEBRUARY 10, 1981
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE,
FEBRUARY 10, 1981
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.
18 The following words and phrases when used in this act shall
1 have, unless the context clearly indicates otherwise, the
2 meanings given to them in this section:
3 "Applicant." A person who files with a depository
4 institution a written request containing such information as
5 required by the depository institution for a mortgage loan.
6 "Depository institution." Any State chartered bank, savings
7 bank, savings and loan association or credit union.
8 "Mortgage loan." A loan which is secured by residential real
9 property or a home improvement loan.
10 Section 3. Prohibition.
11 A depository institution shall not discriminate, on a basis
12 that is arbitrary or unsupported by a reasonable analysis of the
13 lending risks associated with the applicant for a given loan or
14 the condition of the property to secure it, in the granting,
15 withholding, extending, modifying or renewing or in the fixing
16 of the rates, terms, conditions or provisions of any mortgage
17 loan on real property located in the municipality in which a
18 depository institution has a home or branch office or in any
19 municipality contiguous to such municipality, merely because
20 such property is located in a specific neighborhood or
21 geographical area. It shall not be a violation of this section
22 if the mortgage loan is made pursuant to a specific public or
23 private program, the purpose of which is to increase the
24 availability of mortgage loans within a specific neighborhood or
25 geographical area.
26 Section 4. Information available.
27 Each depository institution which has a home office or branch
28 office located within a standard metropolitan statistical area
29 as defined by the Secretary of Banking consistent with the
30 definition used by the Federal Office of Management and Budget,
19810H0545B0572 - 2 -
1 shall compile and make available to the public for inspection
2 and copying at the home office and at least one branch office
3 within each standard metropolitan statistical area in which the
4 depository institution has an office, in accordance with
5 regulations promulgated by the Secretary of Banking:
6 (1) The number and total dollar amount of mortgage loans
7 which were originated or purchased by that institution during
8 each fiscal year, beginning with the last full fiscal year of
9 that institution which immediately preceded the effective
10 date of this act.
11 (2) The number and dollar amount of each such loan by
12 census tract, where readily available at a reasonable cost,
13 as determined by the Secretary of Banking, otherwise by ZIP
14 code, for mortgage loans secured by property located within
15 that standard metropolitan statistical area.
16 (3) The number and dollar amount of all such mortgage
17 loans secured by property located outside such standard
18 metropolitan statistical area.
19 (4) The number and dollar amount of loans which are
20 insured under Title II of the National Housing Act or under
21 Title V of the Housing Act of 1949 or which are guaranteed
22 under Chapter 37 of Title 38, United States Code.
23 (5) The number and dollar amount of loans made to
24 mortgagors who did not, at the time of execution of the
25 mortgage, intend to reside in the property securing the
26 mortgage loan.
27 (6) The number and dollar amount of home improvement
28 loans.
29 (7) The number and dollar amount of all applications for
30 mortgage loans, by census tract or ZIP code as required by
19810H0545B0572 - 3 -
1 paragraph (2).
2 (8) The regulations promulgated by the Secretary of
3 Banking shall be consistent with the terms and provisions of,
4 and regulations promulgated pursuant to the "Home Mortgage
5 Disclosure Act of 1975," Public Law 94-200, and compliance
6 with the provisions of section 304 thereof shall constitute
7 compliance with this section.
8 Section 5. Additional requirement.
9 A depository institution which maintains offices in more than
10 one standard metropolitan statistical area shall make the
11 information required by section 4 available at any such office
12 only to the extent that such information relates to mortgage
13 loans which were originated or purchased by an office of that
14 depository institution located in the standard metropolitan
15 statistical area in which the office making such information
16 available is located.
17 Section 6. Preservation of information.
18 Information required to be compiled and made available under
19 this act shall be maintained and made available for a period of
20 five years after the close of the first year during which such
21 information is required to be maintained and made available. A
22 copy shall be filed annually with the Secretary of Banking.
23 Section 7. Right of injured.
24 A person or applicant who has been discriminated against as a
25 result of a violation of section 3 may bring an action in
26 Pennsylvania in a court of competent jurisdiction. Upon finding
27 that a depository institution is in violation of this act, the
28 court may award actual damages, reasonable attorneys' fees and
29 court costs.
30 Section 8. Subpoena power.
19810H0545B0572 - 4 -
1 The Secretary of Banking shall have the power to make such
2 investigations into any matter pertaining to this act as he
3 shall deem necessary, including the power to hold hearings,
4 issue subpoenas to compel the attendance of witnesses and the
5 production of documents, papers, books, records and other
6 evidence before him. In case of a failure of any person to
7 comply with any subpoena issued by the secretary or to testify
8 to any matter concerning which he may be lawfully interrogated,
9 a court of competent jurisdiction on application of the
10 secretary may issue an order requiring the attendance of such
11 person and the giving of testimony or production of evidence. A
12 person who fails to obey the order of the court may be punished
13 for contempt.
14 Section 9. Power of the Secretary of Banking.
15 If the Secretary of Banking finds that a depository
16 institution is violating the provisions of this act, he shall
17 order the institution to cease its unlawful practices. Such
18 order shall be subject to appellate review.
19 Section 10. Penalty.
20 A depository institution which continues to violate the
21 provisions of this act after having been ordered by the
22 secretary to cease such practices shall be liable to a penalty
23 of $5,000 for each offense to be recovered with costs by the
24 Commonwealth in any court of competent jurisdiction in a civil
25 action prosecuted by the Attorney General. The penalty provided
26 by this section shall be in addition to and not in lieu of any
27 other provision of law applicable upon a depository
28 institution's failure to comply with an order of the Secretary
29 of Banking.
30 Section 11. Promulgation of regulations.
19810H0545B0572 - 5 -
1 The Secretary of Banking is authorized and empowered to
2 promulgate such regulations as he may deem necessary, consistent
3 with sound banking practice, for the proper operation and
4 enforcement of this act.
5 Section 12. Effective date.
6 This act shall take effect in 60 days.
A21L7HVY/19810H0545B0572 - 6 -