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TRI In The News

Bill Includes Mortgage-Worker Fingerprint Mandate

Original article available here.

( - The $300 billion, 537-page mortgage-relief legislation now under consideration in the U.S. Senate includes a little-discussed provision that would require mortgage workers to register their fingerprints with the federal government.

Supporters of the provision have said it would ensure that workers in the mortgage industry are not criminals, but a wide-ranging coalition of critics responded that it would violate privacy rights while doing nothing to improve the mortgage industry.

The provision, which is part of the Housing and Economic Recovery Act o f 2008, would require those who accept mortgage applications, negotiate mortgage terms or process loan packages to be fingerprinted.

According to a statement released by Sens. Chris Dodd (D-Ct.) and Richard Shelby (R-Ala.), the overall bill is an effort to implement "broad improvements to the nation's housing system."

But the alliance that has formed to oppose the fingerprinting mandate ranges from the liberal American Civil Liberties Union, to the American Conservative Union, to the libertarian Competitive Enterprise Institute, to the Association of American Physicians and Surgeons, to the Rutherford Institute.

"We are troubled by the scope of this requirement and the lack of a justification as to how this would serve the goal of reducing mortgage fraud," the alliance wrote in a letter to Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.).

"We think it highly unlikely that proposed fingerprinting requirements will have any tangible benefits in solving problems associated with sub prime lending," the group added.

The letter said that the bill targets lower-level employees who "have little to do with the creation of mortgage products in question."

Sen. Dianne Feinstein (D-Calif.) authored the provision, along with Sen. Mel Martinez (R-Fla.).

Feinstein spokesman Philip LaVelle told Cybercast News Service that 26 states have laws similar to Feinstein's proposal, and the largest trade association representing the mortgage broker industry supported the regulations.

"This legislation is endorsed by the National Association of Mortgage Brokers (NAMB), which represents the very people who would be required to comply with these requirements," said LaVelle. "This information would be used only to ensure that mortgage brokers do not have criminal backgrounds."

Calls to NAMB were not answered by press time.

John Berlau, who is director of the Center for Entrepreneurship at the Competitive Enterprise Institute, and who signed the alliance letter to Reid and McConnell, said that NAMB's views should not be the deciding factor.

"This is much broader than the state bills that I have seen. It raises issues of federalism and even broader, privacy," he said. "Again, it's the federal government trying to supplant the state's role."

LaVelle disagreed.

"This does not violate anyone's privacy rights," he said.


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