The accuracy and scope of disclosed lending data also continued to improve. Disclosure became more frequent, data quality increased, more financial institutions were required to report, and data were collected and distributed electronically. 189
After the successes of the 1990s, community organizations and regulators turned their attention to predatory lending, a practice in which vulnerable minorities were offered higher-interest mortgages and less-favorable terms than other borrowers. 190 In 2002, mortgage lending disclosure rules were amended to require banks to disclose not only the disposition of loan applications but also mortgage prices. Beginning in 2004, lenders were required to report data on loan pricing for loan originations in which the annual percentage rate exceeded the yield of comparable Treasury securities by a specified amount. These new data allowed intermediaries such as the National Community Reinvestment Coalition and the Association of Community Organizations for Reform Now to document disparities in access to credit and press for measures to address predatory lending. 191 Regulators used the expanded information to enforce fair lending laws. In 2005, the Federal Reserve incorporated these new data into their statistical strategies for identifying potentially discriminatory institutions that warranted closer regulatory scrutiny. 192
Disclosing Plant Closings and Layoffs to Reduce Community Disruptions
Concerned over the economic impacts of intensifying global competition in the manufacturing sector and facing political fallout from a growing number of high-profile plant closings and mass layoffs, Congress debated a variety of proposals in the late 1970s and early 1980s. Policy options ranged from restrictions on employer rights to close major facilities to industry-based policies to improve competitiveness and major modifications of the unemployment insurance system.
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In 1988, political compromise led to a more modest targeted transparency approach: the Worker Adjustment and Retraining Notification Act (WARN). 194 This law sought to protect affected parties from the effects of major employment loss by requiring covered employers to provide advance notice of plant closings or large-scale layoffs to affected workers and local communities. 195 The aim of the new disclosure requirement was to improve post-layoff and plant closing outcomes for displaced workers as well as to provide communities facing significant economic impacts with time to find alternative solutions or make adjustments for the impending closings.
Even this modest, disclosure-based response to economic restructuring involved significant political compromises. Opponents of advance notice argued that it would restrict the capital mobility that was increasingly important given international competition from countries like Japan and South Korea. In so doing, it would further widen labor productivity gaps with the rest of the world, making U.S . companies less competitive. Further, critics of advance notice argued that it would lead customers, suppliers, and capital markets to overreact, making already weakened companies less able to recover and expand. If advance notice was to be required, they argued, it should be provided a relatively short time before plant closing. It should also exempt wide classes of employers whose decisions to reduce employment reflected the normal ebb and flow of production, rather than more profound, long-term reductions in employment. 196
The resulting disclosure requirements reflected these concerns. Covered employers were required to provide affected employees with only sixty days notice of a closing.
