Fair Lending

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On November 22, 2021, the CFPB filed its seventh status report with the California federal district court hearing the lawsuit brought by the California Reinvestment Coalition, National Association for Latino Community Asset Builders, and two individual plaintiffs in 2019.  The purpose of the suit was to force the Bureau to issue a proposal implementing the…

After reviewing federal regulators’ traditional theory of redlining, we discuss the types of underwriting practices that are likely targeted by Director Chopra’s recent comments expressing concern about “algorithmic redlining,” examine how the use of machine learning (ML) underwriting models incorporating alternative data can be more inclusive than traditional logistic regression models and result in more…

Expansion of CRA coverage.  On November 1, New York Governor Hochul signed into law amendments (S.5246-A/A.6247-A) to the New York Community Reinvestment Act (NYCRA) that expand the NYCRA’s coverage to non-depository mortgage lenders.  The amendments are effective November 1, 2022.  New York now joins a small group of states, including Illinois and Massachusetts, that…

Targeted advertising has become an important marketing tool for many providers of consumer financial services.  After discussing the primary screening methods offered to providers for identifying consumers to receive their advertising, we look at claims made in private lawsuits involving the intersection of targeted marketing and anti-discrimination laws and how the courts have responded to…

In Part II of this two-part podcast, we continue our examination of the CFPB’s proposed rule implementing Sec. 1071 of the Dodd-Frank Act which would impose significant new data collection and reporting requirements on lenders in connection with credit applications made by small businesses, including women- or minority-owned small businesses.  We discuss the “firewall provision”…

In Part I of this two-part podcast, we examine the CFPB’s proposed rule implementing Sec. 1071 of the Dodd-Frank Act which would impose significant new data collection and reporting requirements on lenders in connection with credit applications made by women- or minority-owned small businesses.  After reviewing the history of Sec. 1071 rulemaking (including the lawsuit…

The Biden Administration’s prioritization of fair lending as a law enforcement focus took center stage last week with the announcement that the U.S. Department of Justice (DOJ) has launched a new initiative targeting redlining and that the DOJ and CFPB, in cooperation with the OCC, had settled the first lawsuit filed under the Initiative. 

New…

More than a month after it was issued, the CFPB’s notice of proposed rulemaking (NPRM) to implement Section 1071 of the Dodd-Frank Act was published in the Federal Register on Friday, October 8.  Section 1071 amended the ECOA to require financial institutions to collect and report certain data in connection with credit applications made by…

The CFPB has issued a notice of proposed rulemaking (NPRM) to implement Section 1071 of the Dodd-Frank Act.  Section 1071 amended the ECOA to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses.  Comments on the NPRM will be due…

In this podcast, we discuss: the compliance challenges that could give rise to enforcement actions against PPP lenders and current and potential future investigatory activity; fair lending guidance for PPP lenders, key fair lending risks, and steps to mitigate fair lending risk; the status of examinations and reviews related to PPP loans; sources of compliance…