The FTC has sent its annual letter to the CFPB reporting on the FTC’s activities related to compliance with the Equal Credit Opportunity Act and Regulation B.
The FTC has authority to enforce the ECOA and Reg. B as to nonbank providers within its jurisdiction. However, like several of the FTC’s prior letters on its ECOA activities, the letter on 2018 activities does not describe any 2018 FTC ECOA enforcement activity and only contains information about the FTC’s research and policy development efforts and educational initiatives. (In December 2018, a group of Democratic Senators sent a letter to the FTC calling on it “to improve its enforcement actions and aggressively police predatory practices at car dealerships.”)
With respect to research and policy development, the letter discusses the following initiatives:
- Hearings on algorithms, artificial intelligence, and predictive analytics. In 2018, the FTC began a series of public hearings called “FTC Hearings on Competition and Consumer Protection in the 21st Century.” One of the hearings looked at competition and consumer protection issues associated with the use of alogorithms, AI, and predictive analytics in business decisions and conduct. The FTC notes that panelists discussed how issues of fairness, bias, and discrimination could impact the use of such technologies and whether current legal protections such as the ECOA were adequate to address those issues.
- Auto buyer study. In 2018, the FTC continued work on a qualitative study of consumers experiences in buying and selling automobiles at dealerships. The FTC believes the results of the study will provide meaningful information about consumers’ experiences and help focus FTC initiatives, including consumer education about the purchase and financing process and business education to foster compliance with laws enforced by the FTC, such as the FTC Act and ECOA.
- ECOA in the military. In 2018, the FTC’s Military Task Force continued to work on military consumer protection issues. Other FTC initiatives to assist military consumers included a training program for servicemembers and their families that included a discussion of ECOA/Reg. B protections.
- Interagency fair lending task force. The FTC continues to be a member of the Interagency Task Force on Fair Lending along with the CFPB, DOJ, HUD, and the federal banking agencies.
With regard to the FTC’s consumer and business educational initiatives, the FTC states that in 2018, it “engaged in efforts to provide education on important issues, including those related to credit transactions to which Regulation B applies or relates.” By way of example, the FTC references a blog post about the need to provide financial education to servicemembers.