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HUD Starts More Fair Lending Testing
HUD Secretary Andrew Cuomo has announced a new fair lending testing initiative that will have cover the largest scope of areas and subject matter tested to date. Happy New Year, Lenders! The announced purpose of the test is to measure the extent and scope of housing discrimination "in greater detail than ever before."
The audit will cost $7.5 million and include between 3000 and 5000 tests. Testing sites will include urban, suburban, and rural areas. The practices tested will include rental, sales, and lending. The program is not purely academic. Test findings will be used for enforcement.
These tests may play a significant role in increasing HUD's fair housing enforcement activity. The White House has directed HUD to double its fair housing enforcement. HUD is now bringing 60-70 enforcement actions per month, compared to 25-30 in the early years of the Clinton administration.
Cuomo stated that housing discrimination "is much more insidious today than it was two to three decades ago." Outright refusals are not the only form of discrimination that minorities face. More subtle forms of discrimination may keep minorities "moving in circles that lead nowhere but to confusion and frustration."
The tests will examine treatment of all racial and ethnic backgrounds and all income levels. The testing contractors will select test targets using advertisements in Sunday papers. Each tester will inquire about the same specific units. The tests will be carefully controlled to ensure measurement of treatment by the lessor, seller, or lender.
Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 18, 12/98
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