fair lending

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Under the leadership of Acting CFPB Director Dave Uejio, the Bureau issued an interpretive rule on March 9, 2021 clarifying that the prohibition against sex discrimination under the Equal Credit Opportunity Act (“ECOA”) and Regulation B includes sexual orientation and gender identity discrimination. This prohibition includes discrimination based on actual or perceived non-conformity with traditional sex- or gender-based stereotypes, and discrimination based on an applicant’s social or other associations.… Continue Reading

The New York Department of Financial Services (DFS) recently announced that it has entered into an agreement with Hunt Mortgage, a licensed mortgage banker, to address the DFS’s findings that there was a “demonstrable lack of lending to minorities and in majority-minority neighborhoods in Western and Central New York by Hunt Mortgage.”  … Continue Reading

On January 26, 2021, 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 leverages the FTC’s annual letter for its own Annual Report to Congress on ECOA.

The FTC has authority to enforce the ECOA and Regulation B with respect to nonbank financial service providers within its jurisdiction.… Continue Reading

The CFPB has released the Summer 2020 edition of its Supervisory Highlights.  The report discusses the Bureau’s examinations in the areas of consumer reporting, debt collection, deposits, fair lending, mortgage servicing, and payday lending that were completed between September 2019 and December 2019.

Key findings are described below.

Consumer reporting. … Continue Reading

The CFPB’s annual fair lending report covering its 2019 activities is scheduled to be published in tomorrow’s Federal Register.  While most of the report recycles information about which we have previously blogged, it does contain the following noteworthy information:

  • The section of the report on “Innovations in access to credit” includes a subsection about “providing adverse action notices when using artificial intelligence and machine learning models.” 
… Continue Reading

After looking at how the 2008 financial crisis and its aftermath might inform regulators’ response to the pandemic, we discuss how collections, loss mitigation/hardship programs, and originations of existing products and new programs designed to assist pandemic-impacted consumers (including changes to credit risk/fraud models to address the pandemic’s effects) can create UDAP and fair lending risk.… Continue Reading

In a new blog post, the CFPB highlights fair lending protections available to small businesses that have been impacted by the COVID-19 pandemic, particularly minority and women-owned businesses.

While the blog post emphasizes the CARES Act Paycheck Protection Program, it is intended to address all credit programs available to small businesses. … Continue Reading

One of the most important areas of consumer financial regulation today is the use of internet- or social media-based platforms to target advertising for consumer financial products.  Its importance stems from the fact that financial services companies can obtain significant benefits from directing advertising to those consumers most likely to be interested in a product, and to be able to qualify for it. … Continue Reading

In this podcast, we examine the fair lending risk to financial services providers that use targeted marketing.  After reviewing what targeted marketing is, the forms it can take, and current litigation, we discuss the potential fair lending claims and the options available to providers to reduce the fair lending risk created by the use of third-party targeted marketing platforms.… Continue Reading

A purported class action filed last week in the U.S. District Court for the Northern District of California, accuses Facebook of discriminating against women and individuals over 40 who were denied advertisements and information about certain financial services opportunities, including those for bank accounts, insurance, and investing.

According to the complaint, Facebook encourages financial services advertisers to target specific populations in order to reach the most “relevant” group and the “kinds of people” the businesses consider to be their “best customers.” … Continue Reading