Magazine article American Banker

Budget Would Increase Outlays for Enforcment of Fair-Housing Law

Magazine article American Banker

Budget Would Increase Outlays for Enforcment of Fair-Housing Law

Article excerpt

The Clinton administration plans to ask Congress to significantly increase spending on enforcement of the fair-housing laws.

As part of his 1999 budget request, due to Capitol Hill early next month, the President will ask for a 10% increase in funding for the Justice Department's civil rights division and a 70% increase for the Department of Housing and Urban Development's fair-housing unit.

Most of the $28.6 million in new funds would be used to investigate apartment owners and real estate agents accused of refusing to offer properties to minorities. But banking lawyers expect at least some funds will be spent to bolster lending bias investigations.

"This reaffirms the administration's commitment to fair-housing enforcement," said Andrew L. Sandler, a partner in the Washington office of Skadden, Arps, Slate, Meagher & Flom. "The expectation is that the level of enforcement activity will likely remain high between now and the end of the Clinton administration."

Warren Traiger, a partner at the New York law firm of Butler, Fitzgerald & Potter, said he expects HUD to use some of the funds to investigate mortgage companies. "This seems to be an area HUD and the government are going to take a closer look at it," Mr. Traiger said.

Laurence E. Platt, a partner at the Washington law firm of Kirkpatick & Lockhart, said he expects HUD to conduct matched-pair testing to see if lenders are discriminating. This technique involves sending a black and a white borrower with similar backgrounds to a lender to see if they are treated similarly. …

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