A chance to right an old wrong

January 17, 2012
President Barack Obama's recess appointment to direct the Consumer Financial Protection Bureau (CFPB), Richard Cordray, wasted no time in announcing the watchdog agency's "nonbank supervision program." Bringing nonbank mortgage lenders more fully and formally under federal supervision could represent a historic moment for fair housing enforcement more than four decades after the passage of the 1968 Fair Housing Act.
     But only if congressional Republicans get out of the way and let Mr. Cordray do his job.
     Primarily targeting discrimination by real estate brokers, the 1968 law made it illegal to refuse to rent or sell real estate on the basis of race, religion, or national origin — all common practices prior to its passage. The act also prohibited discriminatory lending, but it failed to spell out a clear enforcement mechanism for the provision. As a result, over its 44 years, the Fair Housing Act's effectiveness in curbing unfair lending has depended on the willingness and ability of federal regulators to monitor lenders, often with disappointing results.
     The CFPB's nonbank supervision initiative promises to give fair housing enforcement maximum coverage over the nation's mortgage lenders. But this historic advance could be turned back if Republicans continue to obstruct the new consumer protection agency.