Fingerprint Registry in Housing Bill!!!

by John Berlau on May 23, 2008 · 391 comments

Author’s note: See follow-up post “Are Borrowers Next?”

Fingerprints are considered to be among the most personal of information, and fingerprint databases created and proposed in the name of national security have generated much debate. Recently, “Server in the Sky” — a proposed international database of the fingerprints of suspected criminals and terrorists to be shared among the U.S., U.K. and Canada — has ignited a firestorm of controversy. As have cavalier comments by Homeland Security Secretary Michael Chertoff that fingerprints aren’t “personal data.”

Yet earlier this week, a measure creating a federal fingerprint registry totally unrelated to national security passed a U.S. Senate committee almost without notice. The legislation would require thousands of individuals working even tangentially in the mortgage and real estate industries — and not suspected of anything — to send their prints to the feds. The database and fingerprint mandates were tucked into housing and foreclosure assistance bills that on Tuesday passed the Senate Banking Committee by a vote of 19-2.

The measure the committee passed states that “an indvidual may not engage in the business of a loan originator without first … obtaining a unique identifier.” To obtain this “identifier,” an individual is requiredto “furnish” to the newly created Nationwide Mortgage Licensing System and Registry “information concerning the applicant’s identity, including fingerprints for submission” to the FBI and other government agencies.

The fingerprint provisions are contained in a “manager’s amendment” that was hammered out by committee Chairman Chris Dodd, D-Conn, and Ranking Member Richard Shelby, R-Ala., on Monday and attached the next day to a broader housing bailout bill that had been scheduled for a comittee vote. That bill, the “Federal Housing Finance Regulatory Reform Act of 2008,” expands the lending authority of the Federal Housing Administration and the government-sponsored enterprises Fannie Mae and Freddie Mac to refinance the mortgages of troubled borrowers and banks.

The amendment adopted the fingerprint provisions in a section called the “S.A.F.E. Mortgage Licensing Act.” The fingerprints will be part of what the amendment calls “a comprehensive licensing and supervisory database.”

And the database would cover a broad swath of individuals involved with mortgage lending. The amendment defines “loan originator” as anyone who “takes a residential loan application; and offers or negotiates terms of a residential mortgage loan for compensation or gain.” It states that even real estate brokers would be covered if they receive any compensation from lenders or mortgage brokers. Since many jobs in both real estate and mortgage lending are part-time and seasonal, even some of the most minor players in the mortgage market may have to submit their prints.

Justifications listed in the bill for this database include “increased accountability and tracking of loan originators,” “enhance[d] consumer protection,” and “facilitat[ing] responsible behavior in the subprime mortgage market.”

I conducted a wide Internet search and found fingerprint provisions in some state bills, but I don’t know if any, or how many passed. But in my search, I could find no arguments explaining how, specifically, collecting the fingerprints of loan originators would better serve borrowers getting mortgages. I called the Senate Banking Committee asking this question, but my call has not been returned yet. (I will update OpenMarket readers when and if it is.)

I imagine that, yes, a fingerprint registry might stop an ex-con from handling loans, but I doubt it will make even a dent in the lending problems the bill aims to stop. And I would venture to guess that the vast majority of the problem mortages were handled by employees with no criminal record. Rather, this seem like another thoughtless idea that lets politicians brag that they are “getting tough” about a particular problem.

But this fingerprint database, in addition to the privacy violations, might create a host of new problems of mortgage fraud. Identity theft involving fingerprints is becoming a major concern among data security experts. Security consultant Bruce Schneier has argued that hackers can steal electronic images of fingerprints directly from the databases they are stored in. And there is virtually nothing in this bill about security procedures that would apply to this database.

It amazes me. We have wrenching debates about privacy and freedom vs. national security when it comes to proposed anti-terrorist programs. But then a smililar scheme is done in response to an economic problem, and it almost escapes without notice. A similar thing has happened with anti-money laundering requirements that mandate that banks effectively spy on their customers for possible violations of everything from drug laws to the tax code.

mdp May 23, 2008 at 1:04 am

It is time for AMERICANS to tell the government to stick it up their a__. This government is out of control and needs to be put back into the constitutional restraints should be operating under.

Brad May 23, 2008 at 1:09 am

Fingerprints aren't personal data? Then why am I the only one that has these fingerprints? Government is stepping way over the line on this issue!

Is anybody going to stand-up against this?

enough! May 23, 2008 at 1:12 am

The abuses of the Bush era have gone on long enough!

Fingerprints for a home loan? Surely, the American people have gone to sleep and let tyranny into our house.

How will this curb the lax lending standards which got us into this mess? The problem isn't who took the loan, it was whether they ever should have.

POed May 23, 2008 at 1:25 am

This is not the Bush Administration. This is an action taken by the congress of We the people! The same congress that produced your Presidential Nominees – Senator McCain, Senator Obama (and Senator Clinton). Time to throw the bums out.

Scott F May 23, 2008 at 1:27 am

Abuses of the Bush era???? LMAO This is a bill proposed by a Democrat controlled Congress. Point your finger in the right direction.

valrico john May 23, 2008 at 1:28 am

>>>>The abuses of the Bush era have gone on long enough!<<<<<

How is THIS "abuse" tied to Bush? It was an amendment hammered out by committee Chairman Chris Dodd, D-Conn, and Ranking Member Richard Shelby, R-Ala.

Went I was growing up in school and took civics class I was taught that the executive and legislative branches of government were independent from each other…has that changed?

rr3 May 23, 2008 at 1:28 am

The S.A.F.E. bill would require Real Estate Brokers to submit finger prints if the Broker receives compensation from the lender. If I recall correctly The Financial Institution Recovery, Reform Enforcement Act of 1989 (FIRREA) prohibits Real Estate Brokers from receiving compensation from the lender. Silly Congress. How far are we going to let them go?

OptionO May 23, 2008 at 1:31 am

With all due respect 'enough' the Chairman of the Senate Banking Committee is a Democrat, Chris Dodd. However, this is not a Republican vs. Democrat issue but, rather, a blatant failure by our elected officials to govern effectively (from both sides of the isle).

D Petrides May 23, 2008 at 1:31 am

enough! –

GWB is only the latest in a long line of men and women in DC who've taken great pleasure in pissing on the Constitution. Wake up.

Rick May 23, 2008 at 1:31 am

Hey Enough!

These are Democrats passing these bills! They're the ones controlling congress. Wait til Obama gets in there, you ain't seen nothin yet!!!!!

Neil May 23, 2008 at 1:32 am

A lawyer from the USA was implicated in the London Bombing when his finger print matched that of a terrorist. I don't want my finger print on file. Think about proving yourself innocent of that crime!

Dave Schroeder May 23, 2008 at 1:38 am

This is ONLY for persons who are mortgage loan originators and similar. It is a unique identifier. Whether it is a good idea to use fingerprints as this unique identifier is certainly up for debate. However…

This has nothing to do with "Bush"; it passed the Senate Banking Committee by a vote of 19-2. Anyone who misses that should read it again.

Similarly, this story has nothing to do with homeland security, any of Chertoff's comments, or the so-called "Server in the Sky" program..

Looks like Drudge got it wrong, too. Currently running under the very misleading headline of "CONGRESS WANTS YOUR PAWS: Fingerprint Registry in Housing Bill…" (with the implication being that fingerprints are now required to get housing; e.g., see the above comment from someone who is apparently reading-impaired "Fingerprints for a home loan? Surely, the American people have gone to sleep and let tyranny into our house.")

solution May 23, 2008 at 1:39 am

Revolution. Be proactive & organize or join (now!).

We shoudl ALL be sick of our gov's illegal legislations!

Lobbied by the elites, no doubt, for the elites.

The military give an oathe to defend the US Constitution. Is there any other reason that Ron Paul got more political support & contributions from the military than ALL other candidates combined?

DoktorSchnabelVonRom May 23, 2008 at 1:42 am

After fingerprints it'll be DNA then well all get chipped,then the NWO will just rule every aspect of our life.

gudrsbl May 23, 2008 at 1:46 am

Congress just might want to spend a few minutes away from their normal routine of taking bribes and sleeping with hookers to create a test model. They could start off by taking their own fingerprints. Then after doing a self imposed criminal check on themselves, the 3 or 4 congressmen that don't end up in jail can expand the program to include the rest of the corrupt federal system.

Anyway, the reality is…we don't need people control, we need congress control.

Bob May 23, 2008 at 1:47 am

This is one more attempt by big government advocates to classify and identify all Americans in national databases. Although tabloid journalism often leads sensationalism and detail error, the basic issue here is the continued assault on privacy.

Jeff May 23, 2008 at 1:47 am

Lawyers must submit paw prints to their state bar have a professional license to practice law. Doctors must submit paw prints to have a professional license to practice medicine. Teachers, at least in Texas, must submit paw prints to certify their teaching certificate. Moonbats must submit their paw prints in order to professionally bash Bush. So, why shouldn't real estate brokers submit their paw prints to a State as a condition of license to sell real estate? Actually, in some States, this is already the practice.

My only caveat: professional licenses are a State matter, and the US Congress should butt out and not FORCE States to enact legislation on conditional of access to Federal Highway Money.

Ken May 23, 2008 at 1:55 am

Vote for Ron Paul and you'll get back the same freedoms your grandparents had. Enough is enough — this is NOT North Korea and we are NOT destined to be a nation of serfs.

Dan May 23, 2008 at 2:01 am

How can anyone with a lick of sense try to hang this on Bush. Congress is the LEGISLATIVE branch, Democrats control Congress and Democrats control this committee. Therefore this could never have passed without a majority of Democrats supporting it!

will May 23, 2008 at 2:02 am

If you ever served in the armed forces. Everyone is required to give a DNA sample to identify the body parts.

seems logical to me the FEDS are trying to stop the huge amount of mortgage fraud that went on during the housing boom with another stupid idea. I wouldn't submit, they better fight this one.

Sundance 44 May 23, 2008 at 2:09 am

When I read the headline, I was outraged, but after reading the body of the article I began to see the logic to the action. This forces the borrower and lender to put fingerprints on the document that may one day be challenged in court. No longer will "that is not my signature" be allow as a defense if the person's fingerprint is beside his signature.

The mortgage problem is set to cost us trillions of dollars because greedy homebuyers, who thought they were getting something for nothing by buying more house than they could afford, met up with greedy lenders who maximized their commissions by putting them in a mortgage that they knew would some day blow up into a giant mess. This establishes accountablity.

PJ May 23, 2008 at 2:10 am

Too late, American Idol was more important to most of you at the time. What are you going to do about it? Just click on the next news story and pretend it doesn't exist and won't pertain to you. Of course, under the Homegrown Terrorism Act, any misdemeanor (including traffic offenses) can be considered an act of terror. Thus, anyone who commits a minor crime could be considered a suspected terrorist. Doubtful? Google "Florida passes HB 137, speeders face vehicle confiscation, prison time". Didn't see that one on drudge, did ya?

Dan May 23, 2008 at 2:13 am

Posted by: POed – 05/23/2008

This is not the Bush Administration

You are stuoid and can't comprehend what you read. the DEMOCRAPS are doing this. But to you yahoo's Everything is Bush's fault. OH NO KITTY DIED MOM. W DID IT SON. GET A GRIP

John May 23, 2008 at 2:17 am

Hey enough,

Just another case of someone blaming bush just becuase they can. Dont you know who runs congress and the senate now? Sure isn't the republicans

Marc May 23, 2008 at 2:25 am

valrico john said: "Went I was growing up in school and took civics class I was taught that the executive and legislative branches of government were independent from each other…has that changed?"

Yep. They are now formally merged, and have placed themselves above theeople and theonstitution.

JilsyChicago May 23, 2008 at 2:29 am

Most of us have been walking around like mummies. Wake up GIANT the Dems are running loose. Hey Hillary who rejected the drilling bills in the nintys that the Republicans drew up and voted in?????????????/

Big Business and Big government has played us like a flute for 16 years. were learning the Clinton years was just a Island that wasn't even there.

ACK May 23, 2008 at 2:31 am

As a gun owner all I can say is… "how does it feel?"

These people "might" do something illegal so we have to know everything about them. This is the government liberals provide.

Steve May 23, 2008 at 2:31 am

Will this affect Real Estate Appraisers as well?

JilsyChicago May 23, 2008 at 2:35 am

Yeah I'm 43 never owned a pee shoter I am picking up my CZ75 B for my house today. You better get some heat because Pelosi's gas price will be $5.00 by the 4th of July. Good job with those votes Dems. Your all uninformed appeasers.

I live in Illinois where government if fighting daily to take away our guns and they currently charge us .91 cents a gallon of gas. Lay off big oil and clean your own house.

Jim- Bartlett May 23, 2008 at 2:35 am

Yeah I'm 43 never owned a pee shoter I am picking up my CZ75 B for my house today. You better get some heat because Pelosi's gas price will be $5.00 by the 4th of July. Good job with those votes Dems. Your all uninformed appeasers.

I live in Illinois where government if fighting daily to take away our guns and they currently charge us .91 cents a gallon of gas. Lay off big oil and clean your own house.

American Man May 23, 2008 at 2:35 am

Bush is the most dangerous enemy the United States has ever had. Just look at the shambles we are in because this man has spent his presidency protecting the assets of the wealthy at the expense of the United States and her people. Now he wants his prey, the people, registered and documented. This man has betrayed his people. May the Democrats win and end this insanity.

Jim May 23, 2008 at 2:39 am

Has nothing to do with Bush American Man read the story over Dem so you can pick up on the small words and learn something.

Drill Donkeys!!! The planet has cooled the last 10 years

Bill Supporter May 23, 2008 at 2:43 am

Everyone blaming GWB needs to take a political timeout (last time I checked, Decmorats control Congress). Now, lets actually talk about the merits of this bill. It requires that those that work in the lending industry submit fingerprints. Oh, why so, you may ask? Because the lending industry is *FILLED* with (actual, not just metaphorical) ex-convicts. This is *NOT* a database for mom-and-pop or you. It's a database that is kept like a large number of states that require licensed professionals, including lawyers, to submit fingerprints. Why? Because occassionally, even "psychopath killer/rapist" Bob or "I'm going to steal your identity and money" Joe are intelligent enough to enter these industries. I.Q. and a propensity to commit crimes are not the same.

Jimm Motyka May 23, 2008 at 2:48 am

Once all of you get away from thinking there's a two party system in the United States, then your minds will be freed. We need to vote only for Constitutionally minded candidates and get away from "party politics". Voting for the lesser of two evils only results in one thing: still voting for evil!

Regardless of the Republicrats or Demopublicans, this Congress, Justice System, and White House has continually eroded the rights of the American citizens since the days of FDR. Wake up people. It's the bankers that run the country and not the politicians. The politicians are nothing more than the puppets to the bankers.

Have the heart of Toto and pull back the curtain to expose the wizard.

rbcintexas May 23, 2008 at 2:50 am

Hey American Man – you must not be from America because you would know that this is proposed by your Democrat controlled Congress. As far as shambles, isn't it amazing that our economy was going strong until the Democrats took over Congress two years ago. They are more he** bent on trying to bash Bush and destroy any legacy than trying to do what is right for America.

If the Democrats win the White House (Obama) we are all going to be in trouble. Talk about individual rights, your Golden Child Obama has already tried telling the citizens what we can keep our thermostats on, what we can drive, what we can eat, what we can talk about, etc. He is just this side of a communist and is left of the worse President in history, Jimmy Carter.

He hangs around known terrorists (William Ayers), racists ministers (Jeremiah Wright) and known criminals (Razko). Yes if the Democrats win, the insanity will not end it will only be beginning.

dean May 23, 2008 at 2:50 am

This is to "enough!".. Hey it's a DEMOCRAT controlled congress that is pushing this issue. Get over GWB. He's gone in 7 months. Too bad you'll still have to put up with a Republican in the white house. Obama?? please… do a reality check.

PJ May 23, 2008 at 2:50 am

You guys are so caught up in this left-right paradigm. "Its the democrats", "NO ITS THE REPUBLICANS". Give me a break. Why not join together and replace all of them instead of in-fighting and pointing fingers? Do something about it, instead of defending your side.

We are born with 2 hands, and those 2 hands are connected to the same brain. It is the same situation with the 2-party system. And yes, I am a registered republican.

Don't you see that no matter who has the majority, no matter who is in office, you are still getting the same problem— erosion of our civil liberties and a further devaluation of the dollar?

Stand up and complain! Write letters! Run for office yourself! All of the elected officials are our public servants, not our gods. They answer to US– WE THE PEOPLE.

This will slowly become a database for mom-and-pop, and you and me. Just wait and see.

florida person May 23, 2008 at 2:52 am

in florida ALL real estate agents ARE FINGERPRINTED in order to be licensed. wake up author of this story AND congress. already been done.

David May 23, 2008 at 2:52 am

To "American Man"…. you are a brainwashed fool. The Dems are Big Brother and you have fallen for their propaganda! It is liberals and dems who are more dangerous than even the islamic problem! Dems think GWB is the enemy while ignoring the real enemy. All this dem hate is a function of the Clinton Impeachment in the house. History will see this era similar to ….Clinton asleep at the wheel, while at the same time gutting intelligence led USA down the path we are on. George W Bush comes along and defends the USA and never waivers. GWB with his tax cuts overcomes the Clinton/Recession he in heriteed not to mention the million jobs lost in the USA on 9-12. George W spreads freedom and democracy around the world! WAKE THE F UP "AMERICAN MAN"! YOU ARE A BIG BROTHER ENABLER..all you need for a big brother situation is for the govt(dems) and the press to be in bed together. This makes for easier brainwashing of the slow witted(a crutial liberal and democrat party demographic).

Hugh May 23, 2008 at 2:58 am

This is already required for a number of other professions in the financial industry, including stock brokers.

Wally May 23, 2008 at 2:58 am

PJ, total agreement. Just this morning I was think that ballots should not have (R) and (D) by the candidates, but (I) — for incumbent, so we could vote them out.

About the fingerprints…maybe that belongs in the bill and maybe it doesn't, but since when are fingerprints "considered to be among the most personal of information"? I leave mine all over the place. Should I be wearing gloves?

Michael May 23, 2008 at 3:02 am

Holly sh_t people wake up and lets get rid of these people in office, AND STOP ELECTING THE SAME! Obama, McCaine and Clinton are just the status quo. WAKE UP people and stop putting the same sh-t in office!

SRW May 23, 2008 at 3:08 am

IF ANY ONE IS INTERESTED, C. DODD WAS IN CHARGE OF THE BANKING COMMITTEE DURING THE CLINTON ADM. AND CHANGED THESE LAWS FOR HIS SUPPORTERS… THUS ENRON WAS ABLE TO HAPPEN. THESE SAME DEMS ARE UP IN ARMS ABOUT PHOTO AND/ OR FINGERPRINTS FOR VOTING. THEY SAY TOO INTRUSIVE, UNFAIR TO MINORITIES. BUT THEY ARE HAPPY TO SECRETLY INSERT FINGERPRINTS INTO A HOUSING BILL. I AM ALL FOR PHOTO ID FOR VOTING TO STOP THE FRAUD. TO USE YOUR CREDIT CARD OR CASH A CHECK YOU SHOW ID AND CAN BE ASKED TO LEAVE A FINGERPRINT. IT IS NOT LIKE YOU WAKE UP IN THE MORNING AND SOMEONE SAYS LETS HAVE AN ELECTION TODAY.

soazblogger May 23, 2008 at 3:20 am

This is the boiling pot scenario. If you attempt to place a frog in a boiling pot of water, what will it do? It will inevitably jump out immeditaly. If you place the frog in a pot of cold water and slowly turn it up over time, the frog will notice and will be boiled to death. Homeland Security was created as that pot of cold water. Slowly and cunningly our rights our being taken away one by one. Be vigilent and informed.

phil boyce May 23, 2008 at 3:23 am

the supreme court just declared picture id's valid to vote. we pay huge insurance and police fees each year because a small portion of our population deems preying on it's neighbors more appealing than work. i personally think a fingerprint should be your signature on all transactions, check writing, credit card validation, traffic ticket and arrest summons, voting, drivers licenses, green cards, visas and passports, insurance policies, welfare, social security, medicare/medicaid, hospital admissions. think how fast we could eliminate fraud crimes and disappearance of children by non-custodial parents if every interface with government were to be verified with fingerprints or retinal scans.

Mark Goff May 23, 2008 at 3:25 am

When I hear this I always think of George Orwell. Its time to write your elected officials and advise them that you will vote them out of office and not support them because of bills like this. If you don't… I can guarantee it will only get worse. Remember, our elected officials are not too literate and most likely don't even read what they pass.

MW May 23, 2008 at 3:25 am

You want my fingerprints?! Not right now, thanks. Would you like some ammunition? I can send it your way…Get OUT OF MY Country! Evidently you don't know what America is! FO POS.

Vine May 23, 2008 at 3:31 am

Line up to get your number people! Oh..you don't want to give your print, DNA, get a number, step this way to the re-education center.

If we are going to do anything we better do it quick. It's almost too late!

R J Brown May 23, 2008 at 3:35 am

So how will we handle the situation of a handicapped person who has lost both hands and works as a load originator? He has no fingerprints! Yet we must accomodate such persons if they are otherwise able to do the job.

Playin Possum May 23, 2008 at 3:48 am

Bin Laden and his bunch sound better all the time…

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