In an extraordinary announcement yesterday, the US Consumer Financial Protection Bureau (CFPB or Bureau) unveiled a broad expansion of its supervisory procedures to include examining supervised entities for discriminatory conduct that the agency alleges could constitute unfair practices in violation of the Dodd-Frank Act. Going forward, it appears that every exam for unfair, deceptive or abusive acts or practices (UDAAP) is likely to include an assessment of a company’s antidiscrimination programs as applied to all aspects of all consumer financial products or services, regardless of whether that company extends any credit or would otherwise be subject to the Equal Credit Opportunity Act (ECOA). In recent months, the Bureau has been laser focused on issues of fair lending and racial equity in the consumer credit market, including redlining, pricing and algorithmic bias, among others. With this change, the CFPB will be broadening its racial equity focus to cover every aspect of the consumer financial services sector.
Continue Reading CFPB Announces It Will Seek to Extend ECOA-Like Antidiscrimination Provisions Broadly to All Consumer Finance Activities
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Four Takeaways from the CFPB’s First Lawsuit in the Post-Kraninger Era
On February 22, 2021, the Consumer Financial Protection Bureau (CFPB) filed its first lawsuit since the election and the resignation of former Director Kathy Kraninger. The lawsuit alleges that the defendant engaged in deceptive and abusive practices by charging detained immigrants large upfront and monthly fees to arrange for payment of immigration bonds securing the immigrants’ release. The complaint lays out a rather damning set of facts alleging that the defendant misrepresented the nature of its services to consumers, many of whom do not speak English, and then engaged in aggressive collection actions. As the CFPB’s first lawsuit of the Biden administration, it offers some clues as to the direction of CFPB enforcement.
Continue Reading Four Takeaways from the CFPB’s First Lawsuit in the Post-Kraninger Era
Is the CFPB’s Indirect Auto Initiative Over?
By Ori Lev on
It appears that the Consumer Financial Protection Bureau’s (CFPB) controversial indirect auto initiative may be over. Before the holidays, the CFPB issued a blog post setting forth its fair lending priorities for 2017. It identified those priorities as Redlining, Mortgage and Student Loan Servicing, and Small Business Lending. Not only was indirect auto lending not listed, but the CFPB appeared to go out of its way to indicate it was moving away from this issue.
Continue Reading Is the CFPB’s Indirect Auto Initiative Over?
Federal Jury Finds Bank Liable for Reverse Redlining
By Melanie H. Brody & Elyse S. Moyer on
On June 27, 2016, a New York federal jury found that a bank and its affiliated mortgage company violated the Fair Housing Act, the Equal Credit Opportunity Act, and the New York City Human Rights Law by intentionally marketing to African-American and Hispanic homeowners predatory loans with default interest rates of 18 percent.
In 2011,…