Examining Educational Redlining in Lending Act

Summary

Requires the Bureau of Consumer Financial Protection to assess the use of educational data and automated processes in creditworthiness determinations annually.

Mandates coordination with executive agencies and civil rights stakeholders for these assessments no later than 180 days after enactment.

Examines educational data by of the covered person in determining their creditworthiness.

Examines the use of the underwriting processes that gathers data points and creating applicants profiles including automated or algorithmic processes.

Recognizes that risk of automated or algorithmic processes that will establish guidelines to prevent disparate impacts on a protected class.

Obligates the Bureau to report findings and recommendations to Congress 60 days post-assessment.

Requires public disclosure of assessment findings, lists of covered persons using educational data, and list the covered persons that use an underwriting process to create profiles including automated or algorithmic processes that determine creditworthiness.

Defines "applicant’s background" as data derived from an applicant’s attendance at an academic institution, academic major pursued, grades and test scores for admission, and educational attainment.

Defines "certain educational data" as a non-individualized data derived from an applicant’s educational background, such as whether the applicant attended an eligible institution or a junior or community college.

Cites the Act as the “Examining Educational Redlining in Lending Act”.

SECTION 1. SHORT TITLE. This Act may be cited as the “Examining Educational Redlining in Lending Act”.

Requires the Bureau to annually assess the use and risks of educational data in creditworthiness determinations, including automated or algorithmic underwriting processes, and the policies and guidelines in place to prevent disparate impacts on a protected class.

SEC. 2. ASSESSMENT OF CERTAIN EDUCATIONAL DATA. (a) Assessment.—Not later than 180 days after the date of the enactment of this Act and annually thereafter, the Bureau of Consumer Financial Protection (referred to in this section as the “Bureau”) shall, in coordination with relevant executive agencies and national civil rights stakeholders, assess— (1) the use of certain educational data by covered persons in determining the creditworthiness of an applicant; (2) the use of an underwriting process that involves gathering data points and creating applicant profiles, including automated or algorithmic processes, and the risks of such use, by covered persons to determine the creditworthiness of an applicant; and (3) what policies and guidelines are in place to ensure decisions do not result in a disparate impact on a protected class.

Requires the Bureau to submit assessment findings and recommendations to Congress annually.

(b) Report To Congress.—Not later than 60 days after the completion of each assessment required under subsection (a) and annually thereafter, the Bureau shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate the findings of such assessment and any recommendations based on such findings.

Requires the Bureau to publish assessment findings, educational data users, underwriting process users, and data that create applicant profiles, including automated algorithmic processes that determine creditworthiness, within 30 days.

(c) Publication.—Not later than 30 days after the completion of the assessment required under subsection (a), the Bureau shall make available on a publicly accessible website— (1) the findings of the assessment under subsection (a); (2) a list of all covered persons that use certain educational data; and (3) a list of all covered persons that use an underwriting process that involves gathering data points and creating applicant profiles, including automated or algorithmic processes, to determine the creditworthiness of an applicant.

Defines terms related to applicant's background, certain educational data, covered person, eligible institution, and junior college.

(d) Definitions.—In this section: (1) APPLICANT’S BACKGROUND.—The term “applicant’s background” includes data related to or derived from the following: (A) Attendance at an academic institution. (B) Academic majors pursued at an academic institution. (C) Grades or test scores from or used for admission into an academic institution. (D) Educational attainment. (2) CERTAIN EDUCATIONAL DATA.—The term “certain educational data” means data, including non-individualized data, that indicates or is created, derived, or inferred from an applicant’s background including whether an applicant has attended any of the following: (A) An eligible institution. (B) A junior or community college. (3) COVERED PERSON.—The term “covered person” has the meaning given such term in section 1002 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481). (4) ELIGIBLE INSTITUTION.—The term “eligible institution” has the meaning given that term in section 371(a) of the Higher Education Act of 1965 (20 U.S.C. 1067q(a)). (5) JUNIOR OR COMMUNITY COLLEGE.—The term “junior or community college” has the meaning given that term in section 312(f) of the Higher Education Act of 1965 (20 U.S.C. 1058(f)).