NCRC E-newsletter, Vol2, Issue 5

NCRC e-newsletter
Vol 2, issue 5
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In this issue: *

The Insurance Credit Score Disclosure and Reporting Act
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NCRC Hosts Congressional Luncheon
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NCRC Completes Lending Analysis for Norwalk, Connecticut
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Best and Worst Lenders Report Released

Lending Analysis of Northeastern Pennsylvania

NCRC Mobilizes Community Groups against Possible OCC Preemption of Local Anti-Predatory Law

NCRC Testifies in Ohio for Stronger State Law

For more information on NCRC and our programs please visit us at www.ncrc.org
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The Insurance Credit Score Disclosure and Reporting Act
The use of consumer credit reports, credit histories and scoring models in the insurance underwriting and rating process has grown tremendously over the last few years. *Credit scoring is the practice by insurers of using a score based on one’s credit history to screen potential applicants for underwriting acceptability or rating. *90 percent of property insurers now use insurance credit scoring in some way in their underwriting decisions. Consumer groups and advocates are concerned that credit scoring is not an adequate basis for determining eligibility for homeowner and automobile insurance, and that based on research findings it has a negative impact on young people, minorities and people with low incomes. *NCRC joins 20 of its member organizations in supporting Congressman Gutierrez bill that will provide disclosures and protections associated with the use of credit scoring on the insurance. *

The bill in sum requires insurers to disclose the use of insurance credit scoring to applicants and policy holders prior to original or renewal applications; and whether the cost, coverage and availability of the insurance policy will be affected by the consumer report or insurance credit score. It also includes how the scores and predictors were derived and the relative weight of each factor, as well as the scores. *For more information on this bill and/or to sign on contact Crystal Ford at cford@ncrc.org. ***


NCRC Hosts Congressional Luncheon
Opening NCRC’s Annual Conference, member organizations met with Congressional Representatives and attended a Congressional Luncheon. The luncheon featured several key speakers including Senator Paul Sarbanes, Senator Debbie Stabenow, Congresswoman Eddie Bernice Johnson, Congressman James McGovern, and James Socas, minority staff director for Senator Charles Schumer. *Additionally, last year’s *recipient of the Henry B. Gonzalez Award, Luis Gutierrez also gave warm remarks at the luncheon and acknowledged Congresswoman Jan Schakowsky, this year’s recipient of the award. The luncheon proved to be a great success and was well attended (standing room only) by members of NCRC and by featured speakers. ***********


NCRC Completes Lending Analysis for Norwalk, Connecticut
NCRC has recently completed a data analysis for Norwalk Fair Housing in Connecticut, in conjunction with the kick off of their anti-predatory lending campaign. *NCRC looked at subprime lending trends in Norwalk between
1999 and 2001. NCRC found that in 2001, African-Americans were almost three times more likely than whites to receive a refinance loan from a subprime lender. *Using the data provided by NCRC and NCRC’s Consumer Rescue Fund, Norwalk Fair Housing will advocate for anti-predatory legislation in their state as well as provide support to victims of predatory lending practices. *

Best and Worst Lenders Report Released
NCRC opened this year's annual conference with the release of America's Best and Worst Lenders: A Consumer's Guide to Lending in 25 Metropolitan Areas, a comprehensive ranking of lending institutions in 25 metropolitan areas during 2000 and 2001. *Best and Worst Lenders ranks banks, thrifts, mortgage companies and credit unions based on home purchase and refinance lending trends to minorities, women, and low- and moderate-income borrowers and neighborhoods. *Consumers will find Best and Worst to be invaluable in determining which lenders are most likely to approve them for home purchase and refinance loans. *Best and Worst Lenders also contains a series of recommendations for strengthening the Community Reinvestment Act (CRA) and other fair lending and anti-predatory laws. *The report is available online at www.ncrc.org.

Lending Analysis of Northeastern Pennsylvania
NCRC recently conducted a study of prime and subprime lending trends for United Neighborhood Centers of Lakawana County, Pennsylvania. *The analysis shows the growth of the subprime market in the Scranton, PA area from 1995 through 2001. *The analysis uncovered many of the same trends that have been present nationally, such as a disproportionate growth of subprime lending and disparities between minority and white borrowers. *Specifically, subprime lenders were almost non-existent in 1995 but originated close to 10% of home purchase loans in 2001. *Also, within Lakawana County, minority borrowers were roughly three times as likely to receive subprime loans than white borrowers. *In an area that is expecting populationgrowth in the coming years, these figures are alarming but should give the region a better opportunity to combat predatory lending practices.

NCRC Mobilizes Community Groups against Possible OCC Preemption of Local Anti-Predatory Law
National City Bank has asked the Office of the Comptroller of the Currency (OCC) to preempt Georgia’s recent anti-predatory law for nationally chartered banks. *The OCC then asked for public comment on National City’s request. *NCRC argued in our comment letter that federal law allows regulatory agencies to promulgate tougher standards for high-cost than for prime loans and issue regulations allowing state law to apply to high-cost loans. *NCRC members from across the country commented because any sweeping OCC preemption ruling on Georgia’s law would create momentum for federal preemption of laws in other states and localities. *A copy of NCRC’s letter is on our web page at www.ncrc.org. *



NCRC Testifies in Ohio for Stronger State Law
NCRC and NCRC member Self-Help testified at the request of the Coalition on Homelessness and Housing in Ohio at a hearing held by the “Predatory Study Committee” of the state legislature. *A couple of years ago, the state legislature passed a weak anti-predatory law that preempted municipal law. *State legislators then established the study committee to consider whether additional action should be taken regarding predatory lending. *NCRC testified that Ohio metropolitan areas exhibited among the worst disparities in prime and subprime lending in NCRC’s Best and Worst Lenders study because of their high level of segregation and vulnerability to targeting by subprime lenders. *Given this, NCRC argued that the Ohio legislature cannot rely on its recently passed law or the inadequate federal bill proposed by Ohio Representative Bob Ney. *NCRC offered specific suggestions for a new state bill including no lending beyond repayment ability, no flipping, and prepayment penalty limits on high cost loans. *A copy of NCRC’s testimony is on http://www.ncrc.org













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