Category Archives: Fair Lending

Supreme Court grants cert (again) in FHA disparate impact case

By Alan S. Kaplinsky on June 17th, 2013 Posted in Fair Lending

Second time’s the charm? For the second time in less than two years, the U.S. Supreme Court granted certiorari today in a case that presents the question whether plaintiffs suing under the Fair Housing Act (FHA) may bring disparate impact claims. Today’s grant of certiorari was in Mount Holly v. Mount Holly Gardens Citizens in… More >

Decision on Mt. Holly cert petition expected on Monday

By John L. Culhane, Jr. and Christopher J. Willis on June 13th, 2013 Posted in Fair Lending

On Monday, June 17, we expect the U.S. Supreme Court to announce whether it will grant the petition for certiorari in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. The petition is among the certiorari petitions slated to be considered by the Justices at their conference today. The court’s standard procedure is… More >

Trade groups seek guidance on qualified mortgage and disparate impact

By Karen M. Morgan on June 5th, 2013 Posted in Fair Lending, Mortgages

On June 4, eight industry groups sent a letter addressed to HUD Secretary Shaun Donovan and CFPB Director Richard Cordray requesting much needed written guidance from HUD and the CFPB that makes clear that compliance with the CFPB’s ability-to repay/qualified mortgage (QM) final rule will not expose lenders to disparate impact liability under the Fair… More >

House Democrats request auto fair lending information from the CFPB

By Alan S. Kaplinsky on May 31st, 2013 Posted in Fair Lending, Vehicle Loans

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… More >

Petitioners in Mt. Holly file brief in Supreme Court responding to Solicitor General

By Alan S. Kaplinsky on May 28th, 2013 Posted in Fair Lending

The Township of Mount Holly and other petitioners for certiorari in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. filed a brief on May 24, 2013 in the U.S. Supreme Court replying to the brief filed by the Solicitor General. On May 17, the Solicitor General, having been invited to do so by the… More >

Solicitor General files brief opposing certiorari in Mt. Holly

By Alan S. Kaplinsky on May 21st, 2013 Posted in Fair Lending

Last week, the Solicitor General finally filed his brief expressing the views of the United States on whether the U.S. Supreme Court should grant the petition for certiorari pending in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. (The Supreme Court invited the Solicitor General to file the brief in October… More >

ABA programs to feature Ballard attorneys

By Mark J. Furletti on April 5th, 2013 Posted in CFPB Enforcement, CFPB Exams, Fair Lending

If you are at the American Bar Association’s Business Law Section meeting in Washington, D.C. today, you should consider attending a fair lending program that I will be moderating. The program, entitled “You’ve Received Fair Warning on Fair Lending. Now What?”, will be held at 10:30 am at the Washington Hilton in the International Ballroom… More >

Auto finance: can we really call disparate impact “discrimination”?

By Christopher J. Willis on April 1st, 2013 Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

I want to thank Jeff Sovern over at the Public Citizen Consumer Law & Policy Blog for having an interesting back-and-forth with me over the last week about the application of the disparate impact theory of liability to dealer finance charge participation in the auto sales finance context. We’ve been debating whether the CFPB’s announced… More >

How the CFPB’s stance on ECOA in auto finance will raise consumer prices

By Christopher J. Willis on March 27th, 2013 Posted in CFPB Enforcement, Fair Lending, Hot Issues, Vehicle Loans

Ever since the CFPB’s release of its bulletin relating to disparate impact analysis of dealer rate participation last week, the press and consumer advocacy groups have been buzzing about the Bureau’s stance and its potential impact on the industry and consumers. Alan Kaplinsky and I previously blogged about the bulletin and its associated issues here, here… More >

Auto dealer trade groups question CFPB guidance

By Alan S. Kaplinsky on March 25th, 2013 Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

It seems two major auto dealer trade groups share my doubts about whether the CFPB’s position on dealer rate participation will really help car buyers. In a statement responding to CFPB Bulletin 2013-02, the National Automobile Dealers Association and the National Association of Minority Automobile Dealers assert that the CFPB guidance “attempts to force auto… More >

The CFPB previews its coming auto finance fair lending enforcement actions

By Christopher J. Willis on March 21st, 2013 Posted in CFPB Enforcement, Fair Lending, Hot Issues, Vehicle Loans

Earlier today, the CFPB released its guidance bulletin with respect to automobile indirect finance fair lending issues. The bulletin’s intent is unmistakably clear from the accompanying press release’s tag line: “CONSUMER FINANCIAL PROTECTION BUREAU TO HOLD AUTO LENDERS ACCOUNTABLE FOR ILLEGAL DISCRIMINATORY MARKUP.” The bulletin is, in my view, a prelude to the fair lending… More >

The CFPB Stretches ECOA Past the Breaking Point with Auto Finance

By Christopher J. Willis on February 21st, 2013 Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

In a story released last night, Carter Dougherty at Bloomberg reports that the CFPB has warned “at least four banks” that it may take enforcement action against them under ECOA, alleging that a “policy” of “allowing” dealers to negotiate contract APRs with retail buyers had a disparate impact in the pricing of retail installment sale… More >

CFPB’s ECOA disparate impact test finds support in HUD’s FHA “Discriminatory Effects” final rule

By Barbara S. Mishkin on February 14th, 2013 Posted in Fair Lending

In April 2102, the CFPB issued a bulletin to confirm that it plans to apply a disparate impact test in exercising its supervisory and enforcement authority under the Equal Credit Opportunity Act (ECOA) and Regulation B. The CFPB intends to use a disparate impact test for all types of credit, including mortgage lending, student loans,… More >

Will Mt Holly take a dive just like St. Paul?

By Alan S. Kaplinsky on January 10th, 2013 Posted in Fair Lending

During one of the panel discussions at the ABA Consumer Financial Services Committee meeting, a speaker indicated that the newly elected Mayor of Mt. Holly, NJ has publicly stated that he is interested in settling the case now pending before the U. S. Supreme Court. As we previously reported, a cert petition is pending before… More >

CFPB lawyer discusses disparate impact in auto financing and says important development to happen soon

By Alan S. Kaplinsky on January 9th, 2013 Posted in Fair Lending, Vehicle Loans

At the ABA Consumer Financial Services Committee meeting earlier this week, Rick Hackett, Assistant Director of the Research, Markets and Regulations Division of the CFPB, spoke about “Discretionary Pricing in Indirect Auto Finance.” Rick made it very clear that the CFPB is sticking to its position that the disparate impact theory applies under the Equal… More >

The Bureau and DOJ “agree to agree” on fair lending

By Stefanie Jackman on December 11th, 2012 Posted in CFPB Enforcement, Fair Lending

On December 6, 2012, the CFPB and the Department of Justice (“DOJ”) executed a Memorandum of Understanding (“MOU”) aimed at strengthening their coordination in connection with fair lending investigations. The MOU also seeks to avoid duplication of the agencies’ respective enforcement efforts, particularly with regard to coordinating investigations of alleged violations of the Equal Credit… More >

CFPB releases first “Supervisory Highlights” report

By Alan S. Kaplinsky on November 5th, 2012 Posted in CFPB Exams, Fair Lending

The CFPB’s release this week of its first “Supervisory Highlights” report reinforces concerns I previously voiced that, instead of establishing industry-wide standards through the rulemaking process, the CFPB plans to use its supervisory and enforcement authority to impose such standards. The report discusses “the most critical” issues and problems detected by CFPB examiners during examinations conducted… More >

CFPB issues bulletin on appeals procedure

By Christopher J. Willis on November 2nd, 2012 Posted in CFPB Exams, Fair Lending

Yesterday, the Bureau released a Bulletin outlining a procedure for supervised entities to appeal certain conclusions and findings made during the examination process. The appeal procedure is somewhat unclear, since the Bulletin is not very specific about the personnel who will decide the appeal or the standard of review that they will use. Indeed, with… More >

CFPB five-year strategic plan highlights fair lending enforcement

By Christopher J. Willis on October 3rd, 2012 Posted in Fair Lending

The CFPB has issued a draft strategic plan for 2013 to 2018 and is seeking comments which are due by October 25, 2012. In the plan, the CFPB identifies four strategic goals and eleven desired outcomes in support of those goals, together with strategies that describe the actions the CFPB will take to accomplish the outcomes… More >

Diversity standards highlighted in Director Cordray’s remarks to Congressional Black Caucus Foundation

By John L. Culhane, Jr. on September 25th, 2012 Posted in CFPB Exams, Fair Lending

In his remarks last week to the Congressional Black Caucus Foundation, CFPB Director Richard Cordray spoke about the role of the Office of Minority and Women Inclusion (OMWI) that various federal agencies are required to establish pursuant to Section 342 of the Dodd-Frank Act. Those agencies include the Fed, Treasury, CFPB, OCC, FDIC, NCUA, SEC… More >

Will Mount Holly go the distance where Saint Paul did not?

By Christopher J. Willis on June 22nd, 2012 Posted in Fair Lending

The Township of Mount Holly, New Jersey has filed a petition for certiorari in the U.S. Supreme Court raising the issue of whether disparate impact claims are available under the Fair Housing Act. You can see a copy of the petition here. The petition has been docketed and given case number 11-1507 in the Supreme… More >

CFPB Selects Director for Office of Minority and Women Inclusion

By John L. Culhane, Jr. on May 7th, 2012 Posted in CFPB People, Fair Lending

On April 30, the CFPB announced the appointment of Stuart Ishimaru as Director of the CFPB’s Office of Minority and Women Inclusion (OMWI). As we reported, the Dodd-Frank Act required the CFPB and various other federal agencies including the Fed, Treasury, OCC, FDIC, NCUA, SEC and FHFA, to establish an OMWI. Each of those agencies… More >

CFPB confirms plans to use “disparate impact” to prove lending discrimination

By John L. Culhane, Jr. and Christopher J. Willis on April 18th, 2012 Posted in Fair Lending

The “disparate impact” test to prove discrimination under the Equal Credit Opportunity Act and Regulation B is still alive and well. That’s the message sent by the CFPB today in Bulletin 2012-14 (Fair Lending). In the bulletin, which the CFPB says it issued “in response to recent inquiries,” the CFPB “reaffirms that the legal doctrine… More >

Offices of Minority and Women Inclusion to hold roundtables

By John L. Culhane, Jr. on March 20th, 2012 Posted in Fair Lending

Section 342, a provision of the Dodd-Frank Act we have previously written about but that hasn’t otherwise gotten much attention, could ultimately have a significant impact on the banking, credit union and securities industries. The provision required the establishment of an Office of Minority and Women Inclusion (OMWI) by various federal agencies. Those agencies include… More >