The FTC has announced the settlement of a lawsuit filed jointly with the Illinois Attorney General against a group of auto dealerships that alleged the dealerships violated federal and state law by engaging in deceptive practices in connection with add-on charges and by discriminating against Black consumers in connection with the financing of vehicle purchases.
Fair Lending
Lawsuit filed in CA federal district court alleges unlawful discrimination based on credit union’s denial of loan application from DACA recipient
By John L. Culhane, Jr. on
Posted in Fair Lending, Litigation and Court Decisions
In a new lawsuit filed in a California federal district court, a recipient of Deferred Action for Childhood Arrivals (DACA) alleges that a credit union violated the Civil Rights Act of 1866 (42 U.S.C. § 1981) and California’s Unruh Civil Rights Act (UCRA) by denying her loan application based on her status as a DACA…
CFPB updates examination manual to use UDAAP authority to target discriminatory practices, including those involving non-credit products or services
Consistent with expectations that the CFPB under Director Chopra’s leadership would take an expansive view of its statutory authorities, the CFPB has announced its intention to use its authority to prohibit unfair, deceptive, or abusive acts or practices (UDAAPs) to target discriminatory conduct, even where fair lending laws may not apply.
Specifically, the CFPB is…
FTC issues annual ECOA report to CFPB
By John L. Culhane, Jr. on
On February 4, 2022, the FTC sent its annual letter to the CFPB reporting on the FTC’s activities related to the Equal Credit Opportunity Act (ECOA) and Regulation B. The Bureau includes the FTC’s annual letter in its own annual report to Congress on the ECOA.
The FTC has authority to enforce the ECOA and…
CFPB SBREFA Panel Outline on AVM Rulemaking Addresses Potential for Algorithmic Bias In Home Valuations
By Richard J. Andreano, Jr. on
The CFPB recently issued an outline entitled Small Business Advisory Review Panel for Automated Valuation Model (AVM) Rulemaking. While the outline addresses an upcoming joint rulemaking to implement quality control requirements for AVMs, the CFPB specifically focuses on the potential for AVMs to pose fair lending risks to homebuyers and homeowners. The CFPB issued the…
CFPB files another status report in Section 1071 rulemaking lawsuit; Republican lawmakkers send letter to Director Chopra on rulemaking and introduce bills to amend ECOA
By John L. Culhane, Jr. on
On February 22, 2022, the CFPB filed its eighth 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…
CFPB, federal banking agencies, and other federal agencies issue Interagency Statement on Special Purpose Credit Programs Under the Equal Credit Opportunity Act and Regulation B
Yesterday, eight federal agencies joined together to issue an “Interagency Statement on Special Purpose Credit Programs Under the Equal Credit Opportunity Act and Regulation B” (Interagency Statement). The agencies consist of the CFPB, FDIC, OCC, Federal Reserve Board, NCUA, HUD, DOJ, and FHFA. The Interagency Statement indicates that it is intended “to remind…
CFPB and other federal agencies address appraisal discrimination
By Richard J. Andreano, Jr. on
The CFPB’s Fair Lending Director, together with senior officials from other federal agencies, have sent a letter to The Appraisal Foundation (TAF) commenting on proposed changes to the Uniform Standards of Professional Appraisal Practice (USPAP). (TAF is a private, non-governmental organization that sets professional standards for appraisers.) The other agencies joining in the letter are…
CFPB/ FTC/DOJ/Federal Reserve Board file joint amicus brief arguing consumers not applying for credit are “applicants” under ECOA
By John L. Culhane, Jr. on
The CFPB, FTC, DOJ, and Federal Reserve Board have filed a joint amicus brief in the U.S. Court of Appeals for the Seventh Circuit urging the court to reverse a district court ruling that an individual who had already received credit from the defendant and who was not currently applying to the defendant for credit…
CFPB looking for whistleblowers to report potential discrimination arising from the use of artificial intelligence
By Ballard CFS Group on
In their June 2021 request for information regarding financial institutions’ use of artificial intelligence (AI), including machine learning, the CFPB and federal banking regulators flagged fair lending concerns as one of the risks arising from the growing use of AI by financial institutions.
Last week, in an apparent effort to increase its scrutiny of machine…