The State of New York recently enacted legislation that would apply the state’s Community Reinvestment Act to non-depository lenders. Assembly Bill 6247 was passed by the NY legislature in June and signed by the governor November 1st. The bill is effective one year later.
The bill comes in response to an investigation of redlining practices by the Department of Financial Services (“DFS”). That investigation found that many non-depository lenders were not meeting the needs of their local minority communities and recommended legislative action to address the situation. AB 6247 is in direct response to that call.
The bill requires the superintendent of the DFS to consider a mortgage banker’s “record of performance” in meeting the goals of the state’s CRA when taking any action on any application by a mortgage banker licensee. That assessment should include:
- Activities conducted by the mortgage banker to ascertain credit needs of its community.
- The extent of the mortgage banker’s marketing and special programs to make members of the community aware of the services offered.
- The extent of the mortgage banker’s participation in community outreach, community development or redevelopment, and educational programs.
- The extent of participation by the mortgage banker’s board of directors, advisory committee, managing members or executive management in formulating the mortgage banker’s policies and reviewing its performance relative to the CRA.
- Any practices intended to discourage application for types of credit offered by the mortgage banker.
- The geographic distribution of the mortgage banker’s credit extensions, credit applications, and credit denials.
- Evidence of prohibited discriminatory or other illegal credit practices.
- The mortgage banker’s record of opening and closing offices and providing services at offices.
- The mortgage banker’s participation in governmentally-insured, guaranteed or subsidized loan programs for housing.
- The mortgage banker’s ability to meet various community credit needs based on its financial condition, size, legal impediments, local economic condition, and other factors.
- Other factors that reasonably bear upon the extent to which a mortgage banker is helping to meet the credit needs of its entire community.
Governor Hochul’s Press Release on signing AB 6247.
