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Category Archives: Fair Lending

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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 >

House member questions CFPB auto fair lending guidance cost impact

Posted in Fair Lending, Vehicle Loans

The CFPB’s auto fair lending guidance continues to draw criticism from members of Congress, most recently from Congressman Blaine Luetkemeyer, a member of the House Financial Service Committee.   In a November 15 letter to Director Cordray, Mr. Luetkemeyer challenged the CFPB for not having studied how a shift to flat fee compensation for dealers would… More >

A future without dealer participation and what it should look like, according to the CFPB

Posted in Fair Lending, Vehicle Loans

 At the CFPB’s auto finance forum on November 14, Director Cordray and other CFPB officials reiterated their distaste for dealer finance charge participation as a method of dealer compensation in the indirect auto finance market. (As readers know, dealer participation involves dealers setting the finance charge above the rate at which a bank or finance… More >

Mount Holly settlement approved; dismissal of U.S. Supreme Court appeal to follow

Posted in Fair Lending

As expected, the Mount Holly town council voted last night to approve the settlement in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc.  Coming just three weeks before the U.S. Supreme Court oral argument scheduled for December 4, the vote effectively ends the litigation and means a second important opportunity for… More >

Mount Holly settlement update

Posted in Fair Lending

Last night, the Mount Holly town council met to discuss the tentative settlement in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc.  We understand that due to issues concerning the language of the proposed settlement agreement, the council did not vote on the settlement.  It is expected that these issues will… More >

CFPB responds to letter from Senators raising concerns about auto fair lending guidance

Posted in Fair Lending, Vehicle Loans

The CFPB has responded to the October 30 letter it received from a bipartisan group of 22 U.S. Senators raising concerns about the fair lending auto finance bulletin issued by the CFPB this past March.  The Senators’ letter posed a series of questions and we expect many of the Senators will find the answers provided… More >

Tentative settlement reportedly reached in Mount Holly

Posted in Fair Lending

It is looking like our prediction that Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. would settle before the U.S. Supreme Court heard oral argument was accurate.  Late yesterday, the Wall Street Journal reported that the parties have reached a tentative settlement.  A settlement would mean that the Supreme Court has… More >

Senators raise concerns about CFPB auto fair lending guidance

Posted in Fair Lending, Vehicle Loans

A  bipartisan group of 22 U.S. Senators –11 Republicans and 11 Democrats–sent a letter to the CFPB yesterday raising concerns about the fair lending auto finance bulletin issued by the CFPB this past March.  In particular, the Senators question the CFPB’s efforts to “eliminate or severely limit” dealer finance charge participation “through a ‘disparate impact’… More >

Mt. Holly Gardens files merits brief

Posted in Fair Lending

Although settlement discussions are continuing, the respondents in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., filed their merits brief with the U.S. Supreme Court on October 21.  (The Township’s opening brief was filed on August 26.)  The question presented in the case is whether disparate impact claims are cognizable under the… More >

CFPB joins interagency statement on qualified mortgage fair lending risks

Posted in Fair Lending, Mortgages

The CFPB was one of five federal regulators issuing an interagency statement intended to address industry concerns regarding the fair lending risks associated with compliance with the CFPB’s ability-to-repay/qualified mortgage (QM) final rule.  In addition to the CFPB, the other regulators issuing the statement were the OCC, Fed, FDIC and NCUA.  The statement advises creditors that the… More >

CFPB ramps up enforcement of HMDA

Posted in CFPB Enforcement, CFPB General, Fair Lending

The CFPB announced on October 9, 2013 that they entered into consent orders with two financial institutions that allegedly misreported HMDA data.  The CFPB also issued Bulletin 2013-11, which provides guidance on compliance with HMDA, when the CFPB will pursue HMDA enforcement actions, and resubmission of HMDA data. According to the consent orders and the… More >

Use of HMDA data may lead to increase in enforcement actions and litigation

Posted in CFPB General, Fair Lending, Mortgages

The CFPB announced yesterday the release of both the 2012 Home Mortgage Disclosure Act (HMDA) data and a new web-based tool to access that data. In both Director Cordray’s remarks and the blog post, the CFPB appeared to indicate that HMDA data may be used to identify institutions that may be discriminating against protected classes of… More >

Mount Holly case draws numerous amicus briefs supporting Township’s position

Posted in Fair Lending

Thirteen amicus briefs have been filed in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., the case pending in the U.S. Supreme Court in which the question presented is whether disparate impact claims are cognizable under the Fair Housing Act (FHA).   Twelve of the amicus briefs support the Township’s position that the… More >

CFPB Consumer Advisory Board to hold September 18 meeting in Jackson, Mississippi

Posted in Fair Lending

The CFPB has announced that its Consumer Advisory Board (CAB) will hold a meeting in Jackson, Mississippi on September 18, 2013.  The CFPB’s flyer for the event states that “CAB members will engage with invited community and industry panelists and facilitate a conversation about innovative strategies to improve consumer access to credit, information and financial… More >

Township of Mount Holly files opening brief in Supreme Court

Posted in Fair Lending

Despite the pending settlement discussions, the Township of Mount Holly has filed its opening brief in the U.S. Supreme Court.  The question presented in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. is whether disparate impact claims are cognizable under the Fair Housing Act (FHA).  In the case, the Township’s plan… More >

HUD seeks stay of disparate impact suit

Posted in Fair Lending

When we wrote about the lawsuit filed on June 26, 2013 against HUD by two insurance industry trade groups challenging HUD’s final rule formalizing its use of disparate impact liability under the Fair Housing Act (FHA), we suggested that HUD might ask the court to stay further proceedings in the case pending a decision by… More >