Fair Lending

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The Department of Justice (DOJ) announced that it has entered into a settlement with American Bank of Oklahoma (ABOK) to resolve allegations that ABOK engaged in unlawful redlining in Tulsa, Oklahoma.  The DOJ opened its investigation of ABOK after receiving a referral from the FDIC.

In its complaint, the DOJ alleged that from 2017 through at least 2021:

  • All of ABOK’s branches and loan production offices were located in majority-white neighborhoods;
  • For purposes of the CRA, ABOK designated its Tulsa Metropolitan Services Area (MSA) to exclude all of the majority-Black and Hispanic-census tracts in the MSA;
  • ABOK did not assign a single loan officer to conduct outreach in majority-Black and Hispanic areas and did not market, advertise, or take steps to generate loans from majority-Black and Hispanic neighborhoods;
  • ABOK failed to implement effective fair lending compliance management systems;
  • ABOK significantly underperformed its “peer lenders” in generating home loan applications from majority-Black and Hispanic neighborhoods;
  • ABOK made a smaller percentage of HMDA-reportable residential mortgage loans in majority-Black and Hispanic neighborhoods compared to its peers; and
  • ABOK loan officers and executives sent and received emails via their ABOK email accounts containing racial slurs and racist content.
… Continue Reading

The Mortgage Bankers Association and Housing Policy Council (the “Associations”) recently filed an Amici Curiae brief supporting the position of Townstone Financial regarding the scope of the Equal Credit Opportunity Act (ECOA) in the case CFPB v. Townstone Financial which is now before the U.S. Court of Appeals for the Seventh Circuit.… Continue Reading

Townstone Mortgage (Townstone) has filed its brief in the CFPB’s appeal to the U.S. Court of Appeals for the Seventh Circuit from the district court’s decision in the CFPB’s enforcement action against Townstone.  In the decision, the district court ruled that a redlining claim may not be brought under the Equal Credit Opportunity Act (ECOA) because the statute only applies to applicants.… Continue Reading

The CFPB recently issued its annual fair lending report covering its fair lending activity in 2022.

In the report’s discussion of the CFPB’s risk-based approach for prioritizing fair lending supervisory and enforcement activity, the CFPB indicates that in 2022, much of its supervision efforts focused on mortgage origination and pricing, small business lending, policies and procedures regarding geographic and other exclusions in underwriting, and the use of automated systems and models. … Continue Reading

The Federal Financial Institutions Examination Council (FFIEC) recently announced the release of the 2022 Home Mortgage Disclosure Act (HMDA) data.  The CFPB also released a summary of the data.

The FFIEC advises that the Snapshot National Loan-Level Dataset that it released contains the national HMDA datasets as of May 1, 2023, and that key observations from the Snapshot include the following:

•     The number of reporting institutions increased by about 2.63% from 4,338 in 2021 to 4,460 in 2022.… Continue Reading

The CFPB has filed an amicus brief in the U.S. Court of Appeals for the Second Circuit in a private lawsuit brought by a group of eight Black and Hispanic plaintiffs who alleged that the named defendants, which included a bank and its affiliated mortgage company, violated the Equal Credit Opportunity Act (ECOA) and other laws by targeting Black and Hispanic borrowers and neighborhoods with predatory mortgage loans.… Continue Reading

The FTC has filed an amicus brief in support of the CFPB’s appeal to the U.S. Court of Appeals for the Seventh Circuit from the district court’s decision in the CFPB’s enforcement action against Townstone Mortgage (Townstone).  In the case, the district court ruled that a redlining claim may not be brought under the Equal Credit Opportunity Act (ECOA) because the statute only applies to applicants.… Continue Reading

The CFPB has filed its opening brief in its appeal to the U.S. Court of Appeals for the Seventh Circuit from the district court’s decision in the CFPB’s enforcement action against Townstone Mortgage (Townstone).  In the case, the district court ruled that a redlining claim may not be brought under the Equal Credit Opportunity Act (ECOA) because the statute only applies to applicants.… Continue Reading

The Justice Department (DOJ) recently announced a settlement with ESSA Bank & Trust (ESSA), which has agreed to pay over $3 million to resolve allegations that it engaged in a pattern or practice of redlining in violation of both the Fair Housing Act (“FHA”) and the Equal Credit Opportunity Act (“ECOA”) from 2017 through at least 2021. … Continue Reading

A group of federal agencies have proposed reconsideration of value (ROV) guidance for residential real estate valuations. The agencies are the Comptroller of the Currency (OCC), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board (Board) and National Credit Union Administration (NCUA). Comments on the proposed guidance will be due 60 days after publication in the Federal Register.… Continue Reading