Equal Credit Opportunity Act Discrimination

News & Analysis as of

HUD Fair Housing Guidance Raises ECOA Risk in Serving LEP Consumers

New guidance issued by the U.S. Department of Housing and Urban Development (HUD) on Fair Housing Act (FHA) protections for persons with limited English proficiency (LEP) could have reverberations under the Equal Credit...more

CFPB and DOJ settle fair lending claims involving allegations of redlining, discretionary underwriting and pricing, and overt...

The CFPB and DOJ recently announced a proposed consent order with BancorpSouth Bank to settle charges that the bank’s mortgage lending practices violated the Fair Housing Act and the Equal Credit Opportunity Act....more

CFPB issues 2015 fair lending report

The CFPB has issued a report covering its fair lending activities during 2015.  The report states that in 2015, CFPB fair lending supervisory and public enforcement actions required institutions to provide approximately $108...more

Industry trade groups’ renewed challenge to HUD disparate impact rule could yield helpful precedent for ECOA cases

The D.C. district court recently granted two industry trade associations whose members sell homeowners insurance leave to file an amended complaint in their lawsuit challenging the Fair Housing Act (FHA) disparate impact rule...more

Use of Big Data May Violate Federal Consumer Protection Laws, FTC Report Warns

A new Federal Trade Commission (FTC) report, "Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues," warns that certain uses of big data consisting of consumer information may implicate various federal...more

Are Disparate Impact Claims Legally Cognizable Under ECOA?

In Texas Dep’t of Housing and Community Affairs v. The Inclusive Communities Project, 135 S. Ct. 2507 (2015), the Supreme Court held that disparate impact claims are legally cognizable under the Fair Housing Act (“FHA”). As a...more

U.S. Supreme Court Hears Oral Arguments in Case to Decide Whether Loan Guarantors Are “Applicants” Under ECOA

The U.S. Supreme Court heard oral arguments on Monday in the case of Hawkins v. Community Bank of Raymore, the result of which will determine whether a spousal guarantor is an “applicant” under the Equal Credit Opportunity...more

Hudson City Savings Bank Reaches Largest Mortgage Redlining Settlement in DOJ History

The CFPB, DOJ, and Hudson City Savings Bank, F.S.B. (“Hudson City”) recently entered into the largest residential mortgage redlining settlement in DOJ history. On September 24, 2015, the parties filed a Joint Motion for Entry...more

CFPB and DOJ announce redlining settlement

Consistent with recent indications from CFPB and Department of Justice officials that more redlining cases would soon be coming, the CFPB and DOJ have announced a proposed consent order with Hudson City Savings Bank to settle...more

Why Does the CFPB Want to Curb Auto Lenders’ Discretion to Charge Higher or Lower Interest Rates?

On July 14, 2015, the Consumer Financial Protection Bureau (“CFPB”) and Department of Justice (“DOJ”) announced they had reached a “groundbreaking settlement” with American Honda Finance Corporation (“Honda”).(1) The...more

CFPB Refers Another Auto Finance Company to DOJ on Disparate Impact Allegations

Not long after taking action against American Honda Finance Corporation under the disparate impact doctrine for allegedly discriminatory auto loan pricing, the CFPB has struck again—this time reportedly referring Santander...more

ABA seeks supervisory and enforcement standards consistent with Inclusive Communities

The American Bankers Association has sent a letter to the DOJ, Fed, OCC, FDIC, HUD and CFPB requesting confirmation “in interagency guidance, updated exam procedures, and where appropriate amended regulations that the...more

Supreme Court Slams The Brakes On Challenge To Disparate Act

As of now, the Equal Credit Opportunity Act (ECOA) prohibits dealers from unintentional, or “disparate impact,” discrimination in setting dealer reserves in auto financing. This disparate impact can result from policies or...more

Auto Finance Company Agrees to Change Dealer Compensation Policy to Settle CFPB and DOJ Fair Lending Claims

To resolve charges by the Consumer Federal Protection Bureau (CFPB) and the Department of Justice (DOJ) that it engaged in unlawful discrimination in violation of the Equal Credit Opportunity Act (ECOA), American Honda...more

The U.S. Supreme Court’s Decision in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc.

In Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. ___, 2015 WL 2473449 (Jun. 25, 2015), the U.S. Supreme Court, in a 5-4 decision, held that disparate impact discrimination...more

CFPB Continues Crackdown on Fair Lending: Marketing Materials Targeted

In a recent guidance bulletin, the Consumer Financial Protection Bureau reminded mortgage lenders to heed their Equal Credit Opportunity Act (ECOA) obligations when considering applicants receiving public assistance income....more

CFPB and DOJ File Action Against Provident Funding Alleging Discriminatory Lending Policies and Practices

Last week, the Consumer Financial Protection Bureau (CFPB, or “Bureau”), together with the Department of Justice (DOJ), filed an enforcement action against Provident Funding Associates, L.P. (Provident), the second-largest...more

CFPB, DOJ Join in Fair Lending Enforcement Action Against Provident

On Thursday, the CFPB and the Department of Justice (DOJ) filed a joint complaint against the second-largest private mortgage company in the United States alleging it engaged in discriminatory lending practices from 2006 to...more

Justice Department’s ECOA report describes joint CFPB activity

The U.S. Department of Justice recently issued the Attorney General’s 2014 Annual Report to Congress Pursuant to the Equal Credit Opportunity Act Amendments of 1976. The report discusses the DOJ’s 2014 ECOA enforcement...more

DOJ Reaches Deal In Auto Lending Discrimination Case

Why it matters - In what the government calls its first ever discrimination settlement involving “buy here, pay here” auto financing, the Department of Justice (DOJ) and North Carolina Attorney General reached a deal...more

CFPB Proposes Regulating Nonbank Auto Finance Companies

On September 16, the Consumer Financial Protection Bureau (CFPB) issued and requested comment on a proposed rule that would, for the first time, subject nonbank auto finance companies to federal regulation and oversight. The...more

Implementing Regulation B Spousal Signature Provisions

The Equal Credit Opportunity Act and its implementing rule, Regulation B, prohibit any creditor from discriminating based on sex or marital status, among other protected statuses. All the federal banking agencies are involved...more

Court Tosses HUD’s Disparate Impact Rule: Is Protection for Lenders from Disparate Impact Claims on the Horizon?

Since the 1970s, courts have routinely held that the Fair Housing Act, 42 U.S.C. §§ 3601 et seq., may remedy housing discrimination proven through use of the disparate impact theory. The doctrine of disparate impact permits a...more

Eighth Circuit Opens Circuit Split on the Scope of the Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) makes it unlawful for any creditor “to discriminate against any applicant, with respect to any aspect of a credit transaction . . . on the basis of . . . marital status.” The statute...more

CFPB to issue whitepaper on methodology for identifying auto finance discrimination and consider use of advisory opinions

While Director Cordray’s appearance at the House Financial Services Committee’s hearing on the CFPB’s fifth Semi-Annual Report yesterday was accompanied by the usual dose of political theater, his testimony did yield the...more

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