News & Analysis as of

Documenting a Borrower’s Intent to Apply for Joint Credit under the Equal Credit Opportunity Act

The Equal Credit Opportunity Act (“ECOA”) was signed into law by Congress in 1974. This law makes it unlawful for a creditor to discriminate against an applicant in any aspect of a credit transaction on the basis of, inter...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

DOJ And CFPB Team Up To Take On Auto And Mortgage Lenders

The CFPB and the Department of Justice (DOJ) are joining forces to pursue damages and penalties against consumer lenders for violation of the Equal Credit Opportunity Act (ECOA) in pricing consumer loans....more

Disparate Impact Remains Fair Lending Risk To Banks

Lenders seeking judicial relief from the Consumer Financial Protection Bureau’s heightened enforcement of the Equal Credit Opportunity Act were left disappointed by the settlement of Mt. Holly v. Mt. Holly Gardens Citizens in...more

Justice Department Announces Three Fair Lending Actions

Recently, the DOJ released information regarding three fair lending actions, all three of which included allegations related to wholesale lending programs. On September 27, the DOJ announced separate actions—one against a...more

Auto Notes, Fall 2013: Dealer Markup Practices - In a New Era of Federal Enforcement

In March 2013, the U.S. Consumer Finance Protection Bureau (“CFPB”) announced that it would closely scrutinize dealer reserve (“markup”) practices. The federal concern is that dealer markups may result in an illegal disparate...more

DOJ Announces Settlement Of Auto Lending Discrimination Suit

On September 6, the DOJ announced the resolution of a long-running lawsuit against an auto dealer and a bank that financed many of the dealer’s loans, in which the government alleged that the dealer and the bank violated ECOA...more

Sixth Circuit Affirms Dismissal Of ECOA Discrimination Claims

On August 14, the U.S. Court of Appeals for the Sixth Circuit affirmed a district court’s dismissal of claims by a borrower of Iraqi origin that a bank violated ECOA when it refused to restructure the borrower’s loan. 16630...more

Equal Credit Opportunity Act — A Primer on Disparate Impact, Part One

What is fair? In the area of credit, it would seem to mean being treated equally. Thus, for example, the Federal Equal Credit Opportunity Act (ECOA) states that it is unlawful for a creditor to discriminate against an...more

Supreme Court Agrees Again To Decide Critical Disparate Impact Questions under the Fair Housing Act

The question of whether plaintiffs suing under the Fair Housing Act may bring disparate impact claims is back on the U.S. Supreme Court's docket as a result of the Court's decision today to grant certiorari in Mount Holly v....more

CFPB Announces Plans to Hold Auto Lenders Liable for Discriminatory Loans

The Consumer Financial Protection Bureau issued a guidance bulletin announcing that it will treat indirect auto lenders as creditors subject to the Equal Credit Opportunity Act (ECOA). The March 21 bulletin follows the CFPB's...more

Auto finance: can we really call disparate impact “discrimination”?

I want to thank Jeff Sovern over at the Public Citizen Consumer Law & Policy Blog for having an interesting back-and-forth with me over the last week about the application of the disparate impact theory of liability to dealer...more

The CFPB Stretches ECOA Past the Breaking Point with Auto Finance

In a story released last night, Carter Dougherty at Bloomberg reports that the CFPB has warned “at least four banks” that it may take enforcement action against them under ECOA, alleging that a “policy” of “allowing” dealers...more

DOJ Settles Another ‘Pattern or Practice’ Fair Lending Case

The U.S. Department of Justice (DOJ) recently settled a fair lending lawsuit against Texas Champion Bank. This means that, once again, a DOJ attempt to use disparate impact evidence to establish that a lender engaged in a...more

Mortgage Banking Update - Febuary 06, 2013

In This Issue: - Settlement of Michigan Lending Discrimination Lawsuit Underscores Regulatory Focus on Equal Access to Credit - Industry Employers Should Prepare Now for Health Care Reform - Title...more

Settlement of Michigan Lending Discrimination Lawsuit Underscores Regulatory Focus on Equal Access to Credit

The U.S. Department of Justice (DOJ) has reached a settlement with Community Bank of St. Charles, Michigan, in a federal lending discrimination lawsuit filed by DOJ against the bank....more

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