Fair Lending

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The U.S. Department of Housing and Urban Development (HUD) recently issued a final rule reinstating the 2013 version of its disparate impact rule under the Fair Housing Act (Act) to replace a version of the rule adopted by HUD during the Trump Administration in 2020 that never became effective.  The final rule is effective 30 days after publication in the Federal Register. … Continue Reading

The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) have filed a Statement of Interest regarding the application of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) to a lender that allegedly denied a loan to the plaintiffs based on a home appraisal alleged to be discriminatory.… Continue Reading

Park National Bank (“Park National”), based in Ohio, has agreed to pay $9 million to settle allegations brought by the U.S. Department of Justice (DOJ) that it engaged in unlawful redlining practices in the Columbus metropolitan area by not providing mortgage lending services to majority-Black and Hispanic communities from 2015 to 2021.  … Continue Reading

The CFPB and other federal agencies with the responsibility to enforce the Equal Credit Opportunity Act (ECOA) and/or Fair Housing Act (FHAct), recently sent a joint letter to The Appraisal Foundation (TAF) expressing concerns with the Fourth Exposure Draft of Proposed Changes for the 2023 Edition of the Uniform Standards of Professional Appraisal Practice (USPAP). … Continue Reading

On January 31, 2023, the Massachusetts Attorney General’s Office (“Mass AG”) announced a settlement with Hometown Auto Framingham, Inc. (“Hometown Auto”), resolving allegations that the auto dealership had engaged in unfair, deceptive, and discriminatory pricing of add-on products sold to Black and Hispanic consumers.  Under the terms of the settlement, Hometown Auto will pay $350,000, which includes $200,000 in restitution and a $150,000 civil penalty.… Continue Reading

As previously reported, in July 2020 the CFPB filed the first ever redlining complaint against a nonbank mortgage company, Townstone Mortgage (Townstone), under the Equal Credit Opportunity Act (ECOA) and Consumer Financial Protection Act (CFPA).  The US District Court for the Northern District of Illinois recently granted Townstone’s motion to dismiss the CFPB’s complaint on the grounds that the ECOA applies to applicants and not to prospective applicants.  … Continue Reading

As discussed in our prior post, the Department of Justice (DOJ) entered into a settlement with Meta Platforms Inc., formerly known as Facebook Inc. (Meta), to resolve allegations that Meta engaged in discriminatory advertising in violation of the Fair Housing Act (FHA). A key part of that settlement was Facebook’s agreement to build a new Variance Reduction System (VRS) to address disparities for race, ethnicity, and sex between the housing advertisers’ targeted audiences and the group of Facebook users to whom Facebook’s internal personalization algorithms actually deliver the ads. … Continue Reading

The CFPB recently hosted the first hearing of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council (“ASC”) on appraisal bias. The hearing was led by CFPB Deputy Director Zixta Martinez and ASC Executive Director Jim Park. HUD Secretary Marcia L. Fudge, CFPB Director Rohit Chopra, and FHFA Director Sandra Thompson also participated in the hearing.… Continue Reading

The U.S. Department of Housing and Urban Development (HUD) recently issued a draft Mortgagee Letter on reconsideration of value (ROV) policies in connection with appraisals for FHA insured mortgage loans.  The draft Mortgagee Letter follows up on action plan items set forth in the Property Appraisal and Valuation Equity action plan jointly issued by HUD and other federal agencies in March 2022. … Continue Reading

The Federal Reserve System, through its Consumer Compliance Outlook platform, recently hosted its annual Fair Lending Interagency Webinar.  During the session, a variety of fair lending topics were discussed, including redlining, appraisal bias, and Special Purpose Credit Programs (SPCPs), as well as supervision and enforcement-related updates. Presenters included representatives from the following federal agencies: Consumer Financial Protection Bureau (CFPB), Department of Housing and Urban Development (HUD); Department of Justice (DOJ); Federal Deposit Insurance Corporation (FDIC); Federal Housing Finance Agency (FHFA); Federal Reserve Board (FRB); National Credit Union Administration (NCUA); and Office of the Comptroller of the Currency (OCC).… Continue Reading