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FTC sends 2016 ECOA report to CFPB

Posted in Fair Lending, FTC

The FTC has sent its annual letter to the CFPB reporting on the FTC’s activities related to compliance with the Equal Credit Opportunity Act and Regulation B.

The FTC has authority to enforce the ECOA and Reg B as to nonbank providers within its jurisdiction.  However, like the FTC’s letters on its 2014 and 2015 ECOA activities, the letter on 2016 activities does not describe any 2016 FTC ECOA enforcement activity and only contains information about the FTC’s research and policy development efforts and educational initiatives.

With respect to research and policy development, the letter discusses the following initiatives:

  • Auto survey.  In December 2015, the FTC published a notice in the Federal Register seeking comments on its plans to conduct a survey of consumers regarding their experiences in buying and financing automobiles at dealerships.  The FTC published a second notice in September 2016 seeking clearance from OMB for the survey, addressing comments received in response to the 2015 notice, and inviting further comments.  (In addition to ECOA enforcement authority, the FTC has authority to issue unfair or deceptive trade practices rules for auto dealers under Section 5 of the FTC Act.  The survey could be a prelude to such rulemaking.)
  • Big data report.  In January 2016, the FTC issued a report warning that certain uses of big data consisting of consumer information may implicate various federal consumer protection laws.  The report focused on big data’s impact on low-income and underserved populations and protected groups and discussed the potential applicability of various laws, including the ECOA, to big data practices and provided a list of ”questions for legal compliance” for companies to consider in light of these laws.
  • Fintech forum.  In June 2016, the FTC launched a series of forums exploring emerging financial technology and its implications for consumers.  The first forum focused on marketplace lending and examined how marketplace lending operates, potential consumer benefits, consumer protection issues, and the potential applicability of various consumer protection laws.
  • Report on fraud in African American and Latino communities.  In June 2016, the FTC issued a report on its work on fraud prevention, enforcement, and consumer outreach and education in African American and Latino communities.
  • Changing demographics workshop.  In December 2016, the FTC held a workshop in which the topics discussed included how the population is changing, the impact of those changes on the marketplace, concerns about auto lending and discriminatory lending, and the FTC’s future role.
  • Interagency fair lending task force.  The FTC noted its continued membership in the Interagency Task Force on Fair Lending with the CFPB, DOJ, HUD, and the federal banking agencies.

With regard to the FTC’s consumer and business educational initiatives, the FTC discussed its publication of various blog posts in 2016, including posts about its work in combating fraud, its workshop on changing demographics, its fintech forum, and its big data report.