By Jonathan Stempel
(Reuters) - Senior U.S. Democratic lawmakers asked federal regulators to investigate whether Clayton Homes, the mobile home unit of Warren Buffett's Berkshire Hathaway (N:BRKa) Inc, targets minority borrowers with discriminatory lending and collection practices.
A letter on Tuesday from Representative Maxine Waters, the top Democrat on the House Financial Services Committee, and fellow committee members Michael Capuano, Emanuel Cleaver and Keith Ellison called on the Justice Department and the Consumer Financial Protection Bureau to "pursue appropriate corrective action" against Clayton.
It followed a report last month by the Seattle Times newspaper and online BuzzFeed News accusing the largest U.S. mobile home builder of exploiting black, Latino and Native American borrowers by driving them into subprime loans they cannot afford, and harming communities by repossessing homes after borrowers default.
That report also claimed that Clayton's corporate culture condones racism, including against its own workers.
The representatives said the "disturbing business model" described in the report was "highly problematic," in light of Clayton's "uniquely broad control of the manufacture, sale and financing of manufactured homes."
Clayton did not immediately respond on Wednesday to requests for comment on the letter, which the Seattle Times reported earlier.
Last month, the Maryville, Tennessee-based company "categorically and adamantly" denied discriminating against borrowers, and defended the practices of two lending arms, Vanderbilt Mortgage and Finance Inc and 21st Mortgage Corp.
"Race and ethnicity are never considered in pricing or structuring our loans," the company said. Clayton added that it does not tolerate discrimination against its workers.
As of Sept. 30, Clayton borrowers were current on roughly 95 percent of their loans, Berkshire has said.
Buffett did not immediately respond on Wednesday to a email request for comment sent to an assistant.
At Berkshire's annual meeting last May, Buffett said he made "no apologies whatsoever" about Clayton's "exemplary" lending, in response to a question about an earlier Seattle Times story saying that Clayton trapped borrowers into unaffordable loans on depreciating homes.
The Justice Department and the Consumer Financial Protection Bureau did not immediately respond to requests for comment.
Berkshire bought Clayton for $1.7 billion in August 2003.
The unit generates roughly 2 percent of overall pretax profit at Omaha, Nebraska-based Berkshire, which owns close to 90 businesses, including the Geico auto insurer, BNSF railroad and Dairy Queen ice cream stores.