Equal Credit Opportunity Act

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Artificial intelligence is rapidly transforming the consumer financial services industry. From underwriting and fraud detection to customer engagement and collections, financial institutions are increasingly deploying advanced AI tools to automate processes, personalize services, and improve operational efficiency. We are releasing today, on our Consumer Finance Monitor Podcast show, a discussion of what may be the next major technological shift for the industry: Agentic AI in Consumer Financial Services — AI systems capable of acting autonomously, making decisions, and interacting directly with consumers.… Continue Reading

Today’s episode features Part 2 of our November 4 webinar, “The CFPB’s Most Ambitious Regulatory Agenda Ever.” (Part 1 of this series was released on December 18. We encourage you to listen to that episode as well). In Part 2, we continue to unpack the far-reaching implications of the Consumer Financial Protection Bureau’s (CFPB) regulatory ambitions.… Continue Reading

Today’s podcast brings listeners a timely and insightful discussion as our panel examines the CFPB’s proposed amendments to Regulation B under the Equal Credit Opportunity Act (ECOA). As our regular listeners know, we released an episode yesterday, and we are providing this additional special episode in light of a development we consider both time-sensitive and exceptionally important.… Continue Reading

Today’s episode marks the first of a two-part series, with Part Two scheduled for release on November 20th. In this installment, we examine the sweeping changes in fair lending policy and enforcement under the second Trump administration.

The discussion is moderated by Alan Kaplinsky, Senior Counsel, founder and former chair for 25 years of Ballard Spahr’s Consumer Financial Services Group, and features these distinguished experts in the field:

  • Bradley Blower, Founder of Inclusive Partners LLC.
… Continue Reading

On March 28, 2024, four former Walden University students (“Plaintiffs”) filed a proposed settlement both individually and on behalf of a putative class of current and former Walden University (“Walden”) students with the Federal District Court for the District of Maryland to resolve allegations first raised against Walden in a complaint more than two years ago.… Continue Reading

The Department of Justice (DOJ) announced a settlement agreement with Washington Trust Company, of Westerly (WTC) to resolve claims that WTC redlined majority Black and Hispanic neighborhoods in Rhode Island.

In its complaint against WTC, DOJ alleged that the following practices were used to discriminate against Black and Hispanic borrowers from 2016 to at least 2021:

  • WTC located and maintained all of its Rhode Island branches and loan officers outside of majority-Black and Hispanic neighborhoods (WTC designated all five counties in Rhode Island as its Community Reinvestment Act (CRA) assessment area);
  • WTC never had a branch in a majority-Black and Hispanic census tract despite the significant presence of majority-Black and Hispanic neighborhoods and census tracts throughout Rhode Island;
  • WTC did not assign a single mortgage loan officer to conduct outreach, market, advertise, or generate loans from majority-Black and Hispanic neighborhoods;
  • WTC failed to conduct outreach, marketing, and advertising of mortgage services in majority-Black and Hispanic areas;
  • WTC received only 2.4% of its mortgage loan applications from residents of, or for properties located in, majority-Black and Hispanic areas in its CRA assessment area, compared to 9.5% for its peer lenders, and on average 46.5% of the applications generated by WTC in those areas were from White applicants, compared to 25% for its peers.
… Continue Reading

Section 1071 of Dodd-Frank amended the Equal Credit Opportunity Act to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.  Such data includes the race, sex, and ethnicity of the principal owners of the business. 

In April 2011, the CFPB issued guidance indicating that the CFPB would not enforce Section 1071 until the CFPB issued implementing regulations. … Continue Reading

The CFPB has issued “ECOA Baseline Review Procedures” to be used by its examiners.  (The CFPB has labeled the procedures “guidance” and did not add them to its Supervision and Examination Manual.)  The procedures consist of six “baseline review modules” for examiners to use “during ECOA baseline reviews to identify and analyze risks of ECOA violations, to facilitate the identification of certain types of ECOA and Regulation B violations, and to inform fair lending prioritization decisions for future CFPB reviews.” … Continue Reading

We have previously blogged about the CFPB’s laser-like focus on the fair lending practices of banks and non-banks purchasing auto finance consumer contracts from auto dealers. See here, here, here, here, and here.

In many of our posts, we have been very critical of the Bureau’s deployment of the disparate impact theory for identifying violations of the Equal Credit Opportunity Act.… Continue Reading