ethnicity, and sex to allow the government to monitor compliance with
nondiscrimination laws.
Fair Lending Training Bank personnel involved in lending are required to
receive appropriate training on fair lending laws and regulations periodi-
cally from the bank.
Regulation C: Home Mortgage Disclosure Act (HMDA)
(HMDA)^9
The instinct of owning a place in which to live and to produce livelihood is a
natural dream for every individual and family.^10 The motor powering eco-
nomic development throughout history has been the desire to have a place
to live and a means of transportation. In today’s language, that means own-
ing a house and an automobile. That is why the twin backbones of major
developed countries and societies have been the housing and automobile in-
dustries. The development of mortgage financing in the United Kingdom,
Germany, and the United States has helped propel the economies directly
and indirectly:
&Economies are propelleddirectlyby increasing demand for the prod-
ucts, industries, and services associated with building homes.
&Economies are propelledindirectlyby satisfying the citizen’s natural in-
stinct for ownership by making him/her feel that he/she owns a house—
‘‘a piece of the rock.’’ This feeling of ownership makes the citizen
proud of his/her citizenship, deepens the feeling of belonging to the
country, and enhances the value of the real estate in general, as owners
strive to beautify their owned properties by continually maintaining
and improving them. Owning a home strengthens the feeling of respon-
sibility towards the citizens’ own families and the community at large.One of the important parameters used by the U.S. Federal Reserve Sys-
tem, in its decision regarding interest rate and monetary policy, is setting the
interest rates (as discussed in Chapter 5) and its impact on the housing and
automobile industries.
In an effort by the government to monitor home financing activities in
every small town, neighborhood, or city throughout the United States, each
home mortgage financing participant—including each bank and mortgage
finance company—is required to complete a special government form de-
signed to reveal any implicit or systematic discrimination against any mi-
nority when it comes to home financing. This act was designed to eradicate
to the best possible ability of the government any discriminationary activity,
such as the most well-known scheme (practiced in the 1970s) calledred
172 THE ART OF ISLAMIC BANKING AND FINANCE