The Consumer Financial Protection Bureau (“CFPB”) has issued its inaugural Report on Fair Lending to Congress, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The report describes the CFPB’s development and implementation of its fair lending program, the first-year accomplishments, and details on the future of fair lending. The Dodd-Frank Act transferred rulemaking authority of the Equal Credit Opportunity Act and the Home Mortgage Disclosure Act from the Federal Reserve Board to the CFPB. The CFPB is in the planning phase to determine additional data collection and reporting requirements under the fair lending regulations.
The report also lists the most frequently cited fair lending regulatory violations by the Federal Financial Institutions Examination Council agencies, which include:
• Discriminating on a prohibited basis in a credit transaction.
• Improperly requesting information about race, color, religion, national origin, or sex.
• Failing to collect information about applicants seeking credit primarily for the purchase or refinancing of a principal residence including applicant race, ethnicity, sex, marital status, and age, for monitoring purposes.
• Failing to provide sufficient information, including specific reasons for adverse action, in adverse action notification.
• Improperly requiring a borrower to obtain the signature of a spouse or other person in order to be considered for credit approval.
The CFPB report says 12 fair lending cases were referred to the Department of Justice during the reporting period. The Bureau makes it clear in its directive to provide consumer financial protection and ensure equal access to credit that fair lending will continue to be an area of emphasis.
See the full CFPB report here.
To discuss how PYA can assist your institution in maintaining an effective fair lending program, contact the expert listed below at (800) 270-9629.
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