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Tag Archives: Disparate Impact

Financial Services Report – Winter 2016

Posted in Arbitration, Auto Lending, CFPB, Credit Cards, Disparate Impact, Electronic Payments, Enforcement Actions, Fair Lending, Foreclosure, Military Issues, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, UDAAP

Hope you survived all of those awkward Thanksgiving holiday conversations—amazing how divided people are on whether the court got it right in the PHH case, isn’t it? So on we go into the holiday season, while visions of Dodd-Frank repeal dance in our heads. No long winter’s nap for the CFPB, not with the inauguration… Read More

HUD Releases New Guidance on Limited English Proficiency Discrimination Under the Fair Housing Act

Posted in Disparate Impact, Fair Lending, Mortgage

On September 15, 2016, the U.S. Department of Housing and Urban Development issued guidance on how the nondiscrimination provisions in the Fair Housing Act apply to persons who consider an individual’s “Limited English Proficiency,” or limited ability to speak, read, write, or understand English, in housing transactions. The “Office of General Counsel Guidance on Fair Housing… Read More

CFPB Relies on “Mystery Shoppers” in BancorpSouth Mortgage Discrimination Settlement

Posted in CFPB, Disparate Impact, Enforcement Actions, Fair Lending, Mortgage

CFPB “mystery shoppers,” along with secret recordings, were part of the CFPB’s factual allegations in a recent mortgage discrimination settlement. The DOJ and CFPB announced a settlement with BancorpSouth Bank to resolve alleged violations of the Fair Housing Act and Equal Credit Opportunity Act (ECOA). The complaint alleges that from at least 2011 to 2013,… Read More

Big Data, Big Deal

Posted in Disparate Impact, Enforcement Actions, Privacy

The FTC rang in the New Year with a report, Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues. The report wrestles with the implications of using big data analytics to target and make decisions about customers. Some of the FTC’s observations are common sense, but others require more careful analysis. For example,… Read More

#ThrowbackThursday: HUD Issues Aggressive New Fair Housing Rule

Posted in Disparate Impact

In February 2013, Morrison & Foerster published the client alert “HUD Issues Aggressive New Fair Housing Rule.” Summary: The U.S. Department of Housing and Urban Development (HUD) has finally issued its much-debated disparate impact rule. HUD argues that the rule—which it plans to apply retroactively—is simply a codification of its existing position that the Fair… Read More

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

Posted in Auto Lending, CFPB, Disparate Impact

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 Consumer USA, Inc. to the DOJ based on the same theory. See Santander Consumer USA Holdings Inc., Form 10-Q, 8/10/2015, page 33. Like Honda and… Read More

CFPB Brings First ECOA Disparate Impact Action Post-Inclusive Communities

Posted in Auto Lending, CFPB, Disparate Impact, Enforcement Actions

Just over 18 months after bringing a disparate impact-based ECOA case against Ally Financial (“Ally”) for discriminatory auto loan pricing, the CFPB has struck again—this time taking action against American Honda Finance Corporation (“Honda”). Like Ally, Honda stands accused of discriminatory auto loan pricing stemming from the company’s discretionary pricing and dealer compensation practices, i.e.,… Read More

Disparate Impact Doctrine Survives Supreme Court Review

Posted in Disparate Impact

After years of debate and false starts, the Supreme Court has held that the Fair Housing Act (“FHA”) permits disparate impact claims.  In Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., No. 13-1371, 576 U.S. __ (2015), a divided Court held that specific language in the statute permits plaintiffs to challenge… Read More

Breaking News: Supreme Court Upholds Inclusive Communities Disparate Impact Decision

Posted in Disparate Impact

The Supreme Court of the United States released the following opinion this morning: Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., No. 13-1371 The Court affirmed the judgment of the Fifth Circuit and held that disparate impact claims are cognizable under the Fair Housing Act.  The opinion is available here. Stay… Read More

CFPB Increasingly Aiming “Abusiveness” Claims at Servicemember Products and Services

Posted in Auto Lending, CFPB, Disparate Impact, Enforcement Actions, Military Issues

Are servicemembers more financially vulnerable than the civilians they protect? Recent enforcement actions suggest that, in the CFPB’s view, they are. While the Servicemembers Civil Relief Act (SCRA) provides more financial protections to servicemembers than civilian consumers have, the Bureau has also begun to use the CFPA to assert “abusive” claims in cases involving alleged… Read More

Disparate Whatever

Posted in Disparate Impact, Fair Lending

The House has approved an amendment aimed at barring the Department of Justice (DOJ) from enforcing the U.S. Department of Housing & Urban Development’s (HUD) fair lending disparate impact rule. The amendment is to H.R. 2578, the Fiscal Year 2016 Commerce, Justice, Science, and Related Agencies Appropriations Act. It would prohibit the DOJ from using… Read More

CFPB White Paper on Methodology for Evaluating Alleged Racial Disparities in Lending

Posted in CFPB, Disparate Impact, Fair Lending

The Equal Credit Opportunity Act (ECOA) forbids discrimination by a creditor on the basis of race, color, religion, national origin, sex, marital status or age. As the Consumer Financial Protection Bureau (CFPB) has acknowledged, particularly in the non-mortgage context, lenders are generally not permitted to collect demographic information about borrowers. But, regulators, including the CFPB,… Read More

This Time’s the Charm? Supreme Court Takes Up Third Disparate Impact Case

Posted in Disparate Impact, Fair Lending

On October 2, 2014, the Supreme Court granted certiorari in Inclusive Communities Project, Inc. v. Texas Department of Housing and Community Affairs, No. 13-1371, to decide whether disparate impact claims are cognizable under the Fair Housing Act (FHA). Of interest, the Court declined to grant cert. on the question of the appropriate standard for evaluating… Read More