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Category Archives: Fair Lending

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Community groups want CFPB action on small business lending data collection rules

Posted in Fair Lending

A recent American Banker article written by officials of three community groups urges President Obama to publicly denounce Director Cordray for failing to issue regulations implementing the small business lending data requirements of Dodd-Frank Section 1071. Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit… More >

CFPB Issues Study on Credit Reports; Next Steps are Unknown

Posted in Credit Reports, Fair Lending, Research

The CFPB recently released a report that documents the results of a research project undertaken by the CFPB’s Office of Research to better understand the demographic characteristics of consumers without traditional credit reports or credit scores.  The Report concludes that the current credit reporting system is precluding certain populations from accessing credit and taking advantage… More >

CFPB issues 2014 fair lending report

Posted in Fair Lending

The CFPB has issued a fair lending report covering its fair lending activities during 2014.  The report states that in 2014, CFPB fair lending supervisory and public enforcement actions required institutions to provide approximately $224 million in remediation. The report begins with a discussion of factors the CFPB considers in its risk-based prioritization approach for determining… More >

FTC sends ECOA report to CFPB

Posted in Fair Lending

The FTC recently sent a letter to the CFPB reporting on the FTC’s 2014 activities related to compliance with the Equal Credit Opportunity Act and Regulation B. Although the FTC has authority to enforce the ECOA and Reg B as to nonbank providers within its jurisdiction, the letter does not include any specific 2014 FTC… More >

Mortgage Loan Originator “Target Pricing” in the Fair Lending Bullseye

Posted in Fair Lending, Mortgages

The Federal Reserve Board indicated it is scrutinizing mortgage loan pricing models that comply with Regulation Z but nonetheless, in the view of the Board, significantly increase fair lending risk.  The models set a loan revenue target—based on a higher interest rate, discretionary fees, or both—that varies by mortgage loan originator (MLO).  Regulators allege that… More >

CFPB may provide details on auto finance disparate impact methodology at tomorrow’s field hearing

Posted in Auto Finance, Fair Lending

Since the CFPB issued its guidance on indirect auto finance in March 2013, lawmakers and industry have been asking the CFPB to provide details concerning its methodology and proxies for analyzing potential fair lending violations. While the CFPB has provided some information in response to letters from lawmakers, its responses have left many questions unanswered…. More >

Disparate impact cases against HUD: Illinois federal court issues decision; update on D.C. case

Posted in Fair Lending

Because of their potential impact on the CFPB’s conclusion that the ECOA and Regulation B encompass disparate impact claims, we have been following two insurance industry lawsuits involving a challenge to HUD’s Federal Housing Act (FHA) disparate impact rule, with one lawsuit filed in federal district court in D.C. and the other filed in an… More >

NCRC white paper seeks expansive CFPB rulemaking on small business lending data collection

Posted in CFPB Rulemaking, Fair Lending

The National Community Reinvestment Coalition (NCRC) has issued a white paper that urges the CFPB to take an expansive approach in developing regulations on the collection of small business lending data to implement Section 1071 of Dodd-Frank.  Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and maintain certain data… More >

Update on certiorari petition in Texas FHA case

Posted in Fair Lending

As we reported, the petition  for certiorari filed in May 2014 by the  Texas Department of Housing and Community Affairs (Texas DHCA) in Inclusive Communities Project v. Texas Dep’t of Housing and Community Affairs could give the U.S. Supreme Court its third opportunity since 2012 to provide clarity with respect to disparate impact claims under… More >

CFPB orders New Jersey title services company to pay for illegal mortgage referrals

Posted in CFPB Enforcement, Fair Lending, Federal Agencies, Mortgages

On June 12, the CFPB announced that it has issued a Consent Order under which a New Jersey title services company, Stonebridge Title Services Inc., agreed to pay a $30,000 civil money penalty for paying illegal kickbacks for referrals in violation of RESPA Section 8.  According to the CFPB’s press release, Stonebridge paid commissions to… More >

Another insurance industry trade association group challenges the HUD disparate impact rule

Posted in Fair Lending

We have been following the lawsuit in federal district court in D.C. in which two insurance industry trade associations have challenged the HUD disparate impact rule.  The complaint in the D.C. action, which was commenced in June 2013, alleges that the text of the FHA does not proscribe facially-neutral practices that have discriminatory effects.  It… More >

House 2015 DOJ appropriations bill prohibits DOJ use of disparate impact in FHA enforcement actions

Posted in Fair Lending

The FY 2015 Commerce, Justice, Science Appropriations Act (H.R. 4660) passed by the House of Representatives includes an amendment (H. Amdt. 768) that prohibits the U.S. Department of Justice from using any of the funding provided by the Act to enforce the Fair Housing Act using a disparate impact theory.  The amendment reads as follows: … More >

Another Supreme Court disparate impact case?

Posted in Fair Lending

The U.S. Supreme Court could have its third opportunity since 2012 to provide clarity with respect to disparate impact claims under the Fair Housing Act and (by analogy) the Equal Credit Opportunity Act.  After losing on appeal to the Fifth Circuit in March, the Texas Department of Housing and Community Affairs (Texas DHCA) recently filed… More >

CFPB highlights unlawful practices by consumer reporting agencies, debt collectors and payday lenders

Posted in CFPB Exams, Credit Reports, Debt Collection, Fair Lending, Payday Lending

In its Spring 2014 Supervisory Highlights report issued yesterday, the CFPB highlighted deficiencies and violations it found during examinations of consumer reporting agencies (CRAs), debt collectors and payday lenders.  The CFPB has authority to examine entities that qualify as “larger participants” under the final rules it adopted to supervise participants in the debt collection and… More >

CFPB Releases Second Fair Lending Report

Posted in CFPB General, Fair Lending

The CFPB released its second Fair Lending Report to Congress last week, summarizing the Bureau’s fair lending actions in the last year and a half. The Report highlighted the Bureau’s creation and implementation of a risk-based fair lending prioritization process that is aimed at ensuring that its resources are focused on areas that present the… More >

No CFPB regulations in 2014 implementing expanded ECOA small business data collection requirements

Posted in CFPB Rulemaking, Fair Lending

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… More >

Did the CFPB Run a Stop Sign?

Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

As we previously reported, last Friday House Financial Services Committee Chairman Jeb Hensarling (R-TX) sent a letter to CFPB Director Richard Cordray asking for a response by March 13 to specific questions about the methodology and analyses employed by the CFPB in determining whether dealer finance charge participations violate the Equal Credit Opportunity Act and… More >

House Financial Services Committee Chairman to CFPB on Indirect Auto Investigations: Slow Down. Pull Over. And Show Us Some ID.

Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

Since last March, when the CFPB issued Bulletin No. 2013-02, its highly controversial release warning banks and finance companies that purchase motor vehicle installment sales contracts that, under existing law, any dealer finance charge participation may violate the Equal Credit Opportunity Act and Regulation B, numerous members of Congress have been unsuccessful in seeking clear… More >

Trade group criticizes CFPB reliance on enforcement and informal guidance

Posted in CFPB Enforcement, Credit Cards, Fair Lending

The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness has sent a detailed letter to Director Cordray in which it criticizes the CFPB’s approach of “regulation by enforcement settlement combined with issuance of brief guidance statements” in lieu of engaging in rulemaking or otherwise soliciting public input.  In the letter, the Chamber expresses its strong… More >

CFPB explores HMDA changes

Posted in CFPB Rulemaking, Fair Lending, Mortgages

The CFPB announced it will begin the rulemaking process for changes to the reporting requirements under the Home Mortgage Disclosure Act (HMDA). As an initial step, the CFPB will convene a Small Business Review Panel to seek early feedback on ways to improve HMDA reporting. The Dodd-Frank Act requires that the CFPB expand HMDA reporting… More >

Update on disparate impact lawsuit against HUD

Posted in Fair Lending

The settlement and Supreme Court’s dismissal of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. has increased the potential significance of the lawsuit filed in June 2013 in federal district court in Washington, D.C. challenging HUD’s final rule adopted in February 2013 that formalized HUD’s use of disparate impact liability under the FHA.   The… More >

National Consumers League to sponsor Communities of Color Consumer Financial Services Symposium

Posted in Fair Lending

On February 6, 2014, the National Consumers League will be sponsoring a day-long “Communities of Color Consumer Financial Services Symposium.”  The symposium is described as “an examination of how many financial and other institutions have put communities of color at a disadvantage in the financial services arena, with a special emphasis on mortgages, auto loans,… More >

Auto dealer trade group issues fair credit guidance

Posted in Fair Lending, Vehicle Loans

According to a recent Wall Street Journal article, the National Automobile Dealers Association (NADA) has issued fair credit guidance to assist auto dealers in complying with the CFPB’s March 2013 indirect fair lending bulletin.  The bulletin stopped short of mandating the elimination of dealer finance charge participation.  However, in remarks made since the bulletin’s issuance,… More >