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Category Archives: Fair Lending

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Policy Makers Examine the Disparate Impact Risk of Artificial Intelligence and Underwriting

Posted in Fair Lending, Regulatory Developments

Recent Congressional activity reflects increasing concern in the fair lending implications of artificial intelligence (AI) in credit underwriting. Congress and regulatory agencies are likely to press financial services providers to better understand the AI they use and to ensure that its use does not result in unfair treatment of minorities and other protected groups through the… Read More

Home Mortgage Disclosure Act Amendments: CFPB Issues Two Regulation C Releases

Posted in Fair Lending, Mortgage, Regulatory Developments

On May 2, 2019, the CFPB issued two releases related to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The CFPB released a notice of proposed rulemaking (NPRM) to adjust Regulation C’s loan volume thresholds that trigger HMDA and to make other changes. Comments are due 30 days after publication in the Federal… Read More

Financial Services Report – Spring 2019

Posted in Arbitration, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, Student Lending

In the words of Willie Wonka: “Wait a minute — strike that, reverse it!” As loyal readers will recall, in our last issue, we tried to stay current in referring to the CFPB by what Mick Mulvaney declared would be its new name: the Bureau of Consumer Financial Protection. Well, what a difference a director… Read More

Financial Services Report – Winter 2018

Posted in Arbitration, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Foreclosure, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators

In between holiday shopping and merriment, we here at the Financial Services Report are pondering what’s in a name. Not much, said Shakespeare. Isaac Asimov begged to differ in a mystery story about who killed one of the library twins (we won’t give away the twist that hinges on a name). So do companies that… Read More

Financial Services Report – Fall 2018

Posted in Arbitration, Auto Lending, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, Student Lending, UDAAP

So much for the lazy days of summer. It’s been a busy couple of months on both coasts. In a case of déjà vu all over again, a New York federal court found that the CFPB structure is unconstitutional and that the defects infected Title X of the Dodd-Frank Act as a whole. The Judge… Read More

Financial Services Report – Summer 2018

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

No more pencils, no more books. No more CFPB indirect auto lending guidance. No more CFPB Consumer Advisory Board. No more Volcker Rule and risk-based capital for community banks. No more Eric Schneiderman. It’s the end of the school year, and we’ve seen enormous changes on the financial services regulatory landscape since our last Report…. Read More

HUD to Reconsider Disparate Impact Rule

Posted in Disparate Impact, Fair Lending

The U.S. Department of Housing and Urban Development announced that it will “shortly” seek public comment on whether its controversial disparate impact rule is consistent with the Supreme Court’s Inclusive Communities decision. In Inclusive Communities, the Supreme Court held that disparate impact is a cognizable theory of discrimination under the Fair Housing Act. Thus, a defendant may be… Read More

Financial Services Report – Spring 2018

Posted in Arbitration, CFPB, Credit Cards, Electronic Payments, Enforcement Actions, Fair Lending, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators

The 2018 Winter Olympics are over. We watched two 17-year-olds win gold medals in sports that didn’t exist when we were 17. The Garlic Girls, with nicknames from their favorite breakfasts, and the U.S. men’s team won medals in curling. No Miracle on Ice for the U.S. men’s hockey team, but the U.S. women’s team… Read More

Department of Defense Publishes Amends and Adds Further Guidance on Military Lending Act Regulations

Posted in Fair Lending, Military Issues

On December 14, 2017, the Department of Defense published final interpretive rules (the “2017 Interpretive Rule”) amending previously issued interpretive rules on the Military Lending Act. The 2017 Interpretive Rule amends and replaces three specific questions and answers in the interpretive rules issued by the DOD in August 2016, while also adding a new question…. Read More

Financial Services Report – Winter 2017

Posted in Arbitration, Auto Lending, CFPB, Credit Cards, Enforcement Actions, Fair Lending, Foreclosure, Indirect Auto Lending, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators

The holidays came early for the financial services industry. First, the Senate voted to repeal the CFPB’s rule banning class waivers in arbitration agreements in consumer financial contracts. Then, Richard Cordray stepped down as CFPB Director. Former Director Cordray’s attempt to name his interim successor hours before submitting his formal resignation created dueling interim directors… Read More

A First Time for Everything—CFPB Issues Its First No-Action Letter

Posted in CFPB, Disparate Impact, Fair Lending

The CFPB recently announced the issuance of its first no-action letter (“NAL”) to Upstart Network, Inc., an online lending platform that uses alternative data to model consumer credit decisioning and pricing. The letter signifies that the CFPB has no present intention to recommend an enforcement or supervisory action against Upstart for violation of the Equal… Read More

Financial Services Report – Fall 2017

Posted in Arbitration, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Investigations, Mortgage, Preemption, Privacy, Regulatory Developments, State Regulators, UDAAP

Through hurricanes, wild fires, the publication of Hillary Clinton’s book, the birth of Amal and George Clooney’s twins, and the Dodgers’ historic losing streak, Director Richard Cordray and the CFPB’s Final Arbitration Rule are still standing. As my colleague Ollie Ireland explained, these days, it’s easier to predict the weather than it is to predict… Read More

CFPB and Card Issuers Resolve ECOA Action Involving Cards Offered in U.S. Territories and Cardholders with Spanish Language Preference

Posted in CFPB, Credit Cards, Disparate Impact, Enforcement Actions, Fair Lending

On August 23, 2017, the CFPB announced the resolution of an administrative action under the Equal Credit Opportunity Act and its implementing regulation, Regulation B, against American Express Centurion Bank and American Express Bank, FSB. In the proceeding, the CFPB alleged the Issuers violated ECOA by (i) offering credit and charge card products and services to… Read More

Financial Services Report – Summer 2017

Posted in Add On Products, Arbitration, CFPB, Credit Cards, Credit Reports, Enforcement Actions, Fair Lending, Foreclosure, Investigations, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, Student Lending

Summer blockbuster season is officially upon us. Have you seen Wonder Woman yet? What about Guardians of the Galaxy Part 2? It’s déjà vu all over again with Baywatch, Pirates of the Caribbean, Alien, Planet of the Apes, Transformers, Cars, Spider Man, and more Inconvenient Truths from Al Gore all coming to a theatre near… Read More

Financial Services Report – Spring 2017

Posted in Arbitration, CFPB, Credit Cards, Credit Reports, Electronic Payments, Enforcement Actions, Fair Lending, Foreclosure, Investigations, Military Issues, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, State Regulators, Student Lending

In like a lion, out like a lamb—it works for weather; does it work for new administrations? We’ll have to wait and see. We’ll have to wait and see about the length of CFPB Director Richard Cordray’s tenure and the fate of Dodd-Frank, as it appears the Trump administration is focusing on other priorities. So… Read More

CFPB Evaluates Use of Alternative Data and Modeling Techniques in the Consumer Lending Credit Process

Posted in CFPB, Fair Lending, Privacy

On February 16, 2017, the CFPB issued a Request for Information regarding use of alternative data and modeling techniques in the consumer lending “credit process.” The CFPB defines the “credit process” broadly as all processes and decisions made by a creditor during the full life cycle of the credit product, including marketing, pre-screening, fraud prevention,… Read More

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

CFPB Forgoes Traditional Rulemaking Process in Announcing that the Equal Credit Opportunity Act and Regulation B Prohibit Discrimination Based on Gender Identity and Sexual Orientation

Posted in CFPB, Fair Lending, Regulatory Developments

Richard Cordray, director of the CFPB, issued a  letter dated August 30, 2016 (“Cordray Letter”), expressing the CFPB’s views on whether credit discrimination on the basis of gender identity and sexual orientation violates the Equal Credit Opportunity Act (ECOA) and Regulation B. The Cordray Letter was issued in response to an inquiry from Services &… 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

Financial Services Report – Fall 2016

Posted in Add On Products, Arbitration, CFPB, Credit Cards, Credit Reports, Disparate Impact, Electronic Payments, Enforcement Actions, Fair Lending, Foreclosure, Military Issues, Mobile Payments, Mortgage, Payday Lending, Preemption, Privacy, Regulatory Developments, UDAAP

So much for summer! The weather is cooling, the kids are back to school, and we better not see you wearing white so long after Labor Day! For those of you having a little trouble getting back in the swing of things, we thought we’d lead with just a few of the animals making headlines… Read More

A Closer Look at DOD’s New Guidance on the Military Lending Act Regulations

Posted in Fair Lending, Military Issues, Regulatory Developments

On August 26, 2016, the DOD issued an interpretive rule (the “Interpretive Rule”) providing guidance on the DOD’s regulations implementing the Military Lending Act. That same day, we published a high-level summary of the Interpretive Rule, noting that the Interpretive Rule aims to clarify certain ambiguities in the DOD’s July 2015 final rule. In this… Read More

EVENT: Mortgage Bankers Association’s Regulatory Compliance Conference 2016

Posted in Events, Fair Lending, Mortgage, Regulatory Developments

Grand Hyatt Washington 1000 H St. NW Washington, DC 20001 September 18-20, 2016 Join Morrison & Foerster at the Mortgage Bankers Association’s Regulatory Compliance Conference as partners Joe Palmore and Don Lampe speak on the following topics: Major Litigation Affecting Compliance Officers September 19th, 12:45pm Eastern Joe Palmore Planning for CFPB TRID and Servicing Exams… Read More

CFPB, OCC, and Federal Reserve Propose Clarifications to Small Loan Exemption from HPML Appraisal Requirements

Posted in CFPB, Fair Lending, Mortgage, Regulatory Developments

In August 2016, the CFPB, the OCC, and the Board of Governors of the Federal Reserve System (together, the “Agencies”) jointly published in the Federal Register a notice of proposed rulemaking (NPR) to amend the Agencies’ respective regulations exempting certain small loans from the special appraisal requirements that apply to lenders in connection with making… Read More

CFPB Issues Guiding Principles for Loss Mitigation after HAMP

Posted in CFPB, Fair Lending, Foreclosure, Mortgage, Regulatory Developments

On August 2, 2016, the CFPB published a new guidance document titled CFPB’s Principles for the Future of Loss Mitigation (the “Guidance”), which outlines a recommended framework for new, industry-driven foreclosure relief programs. The Guidance largely follows the July 25, 2016, white paper jointly issued by the U.S. Department of the Treasury (“Treasury”), the U.S…. Read More