The Consumer Financial Protection Bureau's ("CFPB" or "Bureau") Office of Fair Lending and Equal Opportunity recently provided insights on the Bureau's expectations for non-banks concerning compliance with fair lending and unfair, deceptive, or abusive acts or practices ("UDAAP") laws.
As clearly stated in the CFPB's Supervision and Examination Manual, the Bureau intends to create a level playing field between banks and non-banks. However, CFPB representatives have indicated that they understand that fair lending programs take time to develop and that they will need to help educate executive and senior management at non-banks concerning the importance of fair lending laws and the risks of non-compliance. As a result, the CFPB does not expect to find fully developed and implemented fair lending programs in place at non-banks during the initial examination cycle and recognizes that such programs will evolve. Nonetheless, non-banks will be expected to quickly develop and maintain fair lending programs that are comparable to those at banks. Similarly, it is expected that UDAAP programs will evolve for both banks and non-banks as the CFPB continues to define "abusive" practices through examinations and enforcement actions.
Fair lending risk assessments will continue to be required for banks and are expected for non-banks. Regarding fair lending statistical analysis, the Bureau's Office of Fair Lending and Equal Opportunity recognizes the fact that each agency approaches statistical analysis differently, and, in keeping with this tradition, the CFPB has developed its own methodology.
One issue that continues to garner discussion among both banks and non-banks is the presence of enforcement attorneys in examination meetings throughout the examination process. Patrice Ficklin, Assistant Director for the CFPB's Office of Fair Lending and Equal Opportunity, has publicly stated that the Bureau understands that both banks and non-banks will want to have their attorneys present if CFPB enforcement attorneys attend compliance examination meetings. She has also stated that the Bureau would not object to the presence of in-house or outside counsel for financial institutions at these meetings so long as such attorneys are not acting in a manner that obstructs the examination process.