In the small basement of a Rockville church, where faded pink curtains and plastic flowers offered the only color to this room of white walls, 13 people came together, prayed — and then talked about predatory lending in Montgomery County.
The region’s NAACP and human rights office met at Mt. Calvary Baptist Church Tuesday night to discuss a housing discrimination bill, which is aimed at stopping predatory lending practices that will come before the council next week.
The bill, sponsored by Council President Tom Perez, D-Silver Spring, and Councilman Michael Subin, D-At Large, would increase compensatory damages for humiliation and embarrassment, require the human rights office to provide an annual report on discriminatory lending practices and establish procedures for the consumer affairs office to identify and process a complaint based on discriminatory, predatory or abusive lending practices.
The law would not, however, include a provision that used to be in the bill, which would have made discrimination easier to prove by showing impact to the renter or homeowner, instead of proving discriminatory intent by a lender. That provision was voted down.
“It’s terribly important we have that piece in the bill,” said Janet Ricks, from Potomac. “(Montgomery County is) one of the most blatant of the offenders.”
NAACP President Henry Hailstock, who led the meeting Tuesday night, agreed with Ricks.
“If you don’t have that clause, (the bill) is for naught,” he said. It’s just a piece of paper that makes people feel good, but has no substance.”
While the impact test is commonly used in cases of employment discrimination — in which employees can claim that a company’s hiring practice reflects bias against protected classes — the section was struck from the bill after the Maryland Bankers Association raised concerns that banks would only make loans to people who have perfect credit.
“It would have a chilling effect on mortgage lending in Montgomery County,” said MBA President Kathleen Murphy. “If that language stays in the bill, there’s a very strong possibility that the loan would not be sold into the secondary mortgage market. . . . If a lender can’t sell, it means they can’t make any more loans.”
But Dan Parr, Perez’s chief of staff, said bankers are just trying to avoid a regulation that would make proving predatory lending easier.
“Why would we want to make it more difficult?” Parr said. “We could actually lose the one tool that’s most effective to win a case. If (the clause) is not in there, we would have to find a (lender) witness or a tape or a memo that says, ‘We’re doing this because we want to discriminate against this person.’ That’s just very unlikely to happen.”
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