Third Annual Fair Lending Report Released

On April 28, the CFPB published its third annual report to Congress on its fair lending activities. The Bureau’s mission includes ensuring fair, equitable, and nondiscriminatory access to credit for all consumers, and that markets for consumer financial products and services are fair, transparent, and competitive. The Report provides an overview of the work performed by the CFPB and accomplishments made during the past year.

According to the  Report, mortgage lending remains a “key priority” for the Office of Fair Lending in terms of both supervision and enforcement, with the focus being largely on Home Mortgage Disclosure Act (HMDA) data integrity and potential fair lending risks in connection with redlining, underwriting, and pricing. In addition, the indirect auto lending industry is also another critical area of concern and focus identified in the Report and, more particularly, the use of discretionary pricing policies within this industry that have resulted in discrimination against certain minorities in violation of the Equal Credit Opportunity Act (ECOA).  For instance, during the past two years, multiple supervisory reviews by the CFPB have revealed discretionary dealer markup and compensation policies which may discriminate against certain minorities. The report also monitored the credit card market, including enforcement actions against a company for its alleged failure to provide certain consumers who had a Puerto Rico mailing address or preferred to communicate in Spanish with debt relief offers. Lastly, the report noted outlined the rights of a consumer whose income is derived, in part or in whole, from a public assistance program. According to the report, the Bureau’s efforts in 2014 to protect consumers from credit discrimination lead to financial institutions providing approximately $224 million in monetary relief to over 300,000 consumers.

In closing the CFPB noted that they look forward to maintaining a sharp focus on discrimination and ensuring that markets operate fairly and effectively for all market participants in 2015.

 

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