News & Analysis as of

Disparate impact cases against HUD: Illinois federal court issues decision; update on D.C. case

Because of their potential impact on the CFPB’s conclusion that the ECOA and Regulation B encompass disparate impact claims, we have been following two insurance industry lawsuits involving a challenge to HUD’s Federal...more

Another Supreme Court disparate impact case?

The U.S. Supreme Court could have its third opportunity since 2012 to provide clarity with respect to disparate impact claims under the Fair Housing Act and (by analogy) the Equal Credit Opportunity Act. After losing on...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

Mt. Holly Settled: Disparate Impact Questions Linger

The Consumer Financial Protection Bureau (CFPB) and other agencies that apply disparate impact tests under the Equal Credit Opportunity Act (ECOA) appear to have dodged another bullet. The background, recent events, and...more

Tentative settlement reportedly reached in Mount Holly

It is looking like our prediction that Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. would settle before the U.S. Supreme Court heard oral argument was accurate. Late yesterday, the Wall Street Journal...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

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

New York Federal District Court Holds FHA Disparate Impact Claims Against Mortgage Securitizer Timely, ECOA Claims Time-Barred

On July 25, the U.S. District Court for the Southern District of New York held that a putative class of African-American borrowers can pursue claims against a financial institution alleged to have financed and purchased...more

CFPB issues ECOA baseline review procedures for examiners

The CFPB has issued “ECOA Baseline Review Procedures” to be used by its examiners. (The CFPB has labeled the procedures “guidance” and did not add them to its Supervision and Examination Manual.)...more

Infobytes - A Weekly In-depth review of news & developments in the financial services industry - July 26, 2013

In This Issue: - FEDERAL ISSUES - STATE ISSUES - COURTS - MISCELLANY - FIRM NEWS - MORTGAGES - BANKING - CONSUMER FINANCE - SECURITIES - E-COMMERCE - PRIVACY/DATA SECURITY - Excerpt...more

More on new disparate impact suit against HUD

Last week, we reported that a lawsuit was filed on June 26 in federal district court in Washington, D.C. challenging HUD’s final rule formalizing its use of disparate impact liability under the Fair Housing Act (FHA)....more

Supreme Court grants cert (again) in FHA disparate impact case

Second time’s the charm? For the second time in less than two years, the U.S. Supreme Court granted certiorari today in a case that presents the question whether plaintiffs suing under the Fair Housing Act (FHA) may bring...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

Trade groups seek guidance on qualified mortgage and disparate impact

On June 4, eight industry groups sent a letter addressed to HUD Secretary Shaun Donovan and CFPB Director Richard Cordray requesting much needed written guidance from HUD and the CFPB that makes clear that compliance with the...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

How the CFPB’s stance on ECOA in auto finance will raise consumer prices

Ever since the CFPB’s release of its bulletin relating to disparate impact analysis of dealer rate participation last week, the press and consumer advocacy groups have been buzzing about the Bureau’s stance and its potential...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

CFPB’s ECOA disparate impact test finds support in HUD’s FHA “Discriminatory Effects” final rule

In April 2102, the CFPB issued a bulletin to confirm that it plans to apply a disparate impact test in exercising its supervisory and enforcement authority under the Equal Credit Opportunity Act (ECOA) and Regulation B. The...more

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