Senate banking hearing spotlights racial disparities in mortgage lending and public-banking proposals

At a public hearing of the New York State Senate Banking Committee, state regulators, the attorney general's office, industry representatives and community groups presented competing explanations and proposals to address racial disparities in mortgage lending and access to credit across New York.

The hearing opened with Chair State Senator James Sanders Jr. framing the issue as central to the American dream: "If we are saying that that is not happening for a portion of the population, then that my friends is a very much attack on the idea of America." He and Senator Jabari Brisport said they convened the session to assess whether discrimination persists in mortgage origination and servicing and to consider remedies including public banking.

Why it matters: testimony and published analyses offered consistent evidence of lending disparities, while the Department of Financial Services and banking trade groups urged careful interpretation of public data and described ongoing regulatory and industry efforts. The Attorney General's Civil Rights Bureau summarized a 2023 office report showing persistent, statewide racial gaps at multiple stages of mortgage origination and refinancing. The Department of Financial Services described examinations, consent orders and a proposed regulation to expand the state's Community Reinvestment Act (CRA) to nonbank mortgage lenders. Advocacy groups called for stronger remedies including public banks and greater funding for community lenders; mortgage bankers and the New York Bankers Association pointed to underwriting constraints, secondary-market rules and limits of public HMDA data.

DFS role and findings: Samantha Darche, deputy superintendent of the Consumer Examination Unit at the New York State Department of…