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
Tag Archives: Fair Lending
Department of Defense Publishes Amends and Adds Further Guidance on Military Lending Act Regulations
Posted in Fair Lending, Military IssuesOn 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
A First Time for Everything—CFPB Issues Its First No-Action Letter
Posted in CFPB, Disparate Impact, Fair LendingThe 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
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 LendingOn 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
CFPB Evaluates Use of Alternative Data and Modeling Techniques in the Consumer Lending Credit Process
Posted in CFPB, Fair Lending, PrivacyOn 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, UDAAPHope 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
Whither the CFPB? In Uncertain Times, Rep. Hensarling’s Vision May See New Life
Posted in Regulatory DevelopmentsGiven the outcome of the presidential election, the focus is now on President-Elect Trump’s campaign promises to scale back the Dodd-Frank Act and pursue deregulation of financial services. As of now, little is known about specific actions the new administration will pursue after inauguration. There is, however, a template for reform, namely, the Financial Creating… 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 DevelopmentsRichard 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
A Closer Look at DOD’s New Guidance on the Military Lending Act Regulations
Posted in Fair Lending, Military Issues, Regulatory DevelopmentsOn 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 DevelopmentsGrand 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 DevelopmentsIn 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 DevelopmentsOn 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
Department of Defense Issues New Guidance on Military Lending Act Regulations
Posted in Fair Lending, Military IssuesOn August 26, 2016, the Department of Defense (DOD) issued an interpretive rule providing guidance on the DOD’s regulations implementing the Military Lending Act (MLA). Specifically, the interpretive rule aims to clarify certain ambiguities in the DOD’s July 2015 final rule, which significantly expanded the scope of the MLA to cover new types of creditors… Read More
FDIC Releases Proposed Third-Party Lending Guidance
Posted in Fair Lending, Regulatory DevelopmentsOn July 29, 2016, the board of directors of the Federal Deposit Insurance Corporation (FDIC) released a proposal regarding third-party lending guidance (“Proposed Guidance”) as part of a package of materials designed to “improve the transparency and clarity of the FDIC’s supervisory policies and practices.” The Proposed Guidance elaborates on previously issued agency guidance on managing third-party risks and,… Read More
CFPB Relies on “Mystery Shoppers” in BancorpSouth Mortgage Discrimination Settlement
Posted in CFPB, Disparate Impact, Enforcement Actions, Fair Lending, MortgageCFPB “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
CFPB Poised to Expand Regulation to Small Business Lending: Expect the Unexpected
Posted in CFPB, Fair Lending, Regulatory DevelopmentsRecent initiatives by the CFPB to dramatically expand its regulation of small business lending present a confluence of concerns to industry participants. These initiatives include the CFPB’s extension of fair lending rules to types of credit not ordinarily considered to be subject to the agency’s jurisdiction. The CFPB’s focus on business lending likely will have… Read More
Treasury Issues White Paper on Online Marketplace Lending
Posted in CFPB, Fair LendingOn May 10, 2016, the U.S. Department of the Treasury (“Treasury”) issued a white paper, entitled “Opportunities and Challenges in Online Marketplace Lending” (“White Paper”). The White Paper describes Treasury’s review of online marketplace lending and provides Treasury’s recommendations to the private sector and the federal government on how to encourage “safe growth” in the… Read More
EVENT: ABA’s Military Lending Act: A Regulation for All Banks Webinar
Posted in Events, Fair Lending, Regulatory DevelopmentsOf Counsel Leonard Chanin will speak on the American Bankers Association’s “Military Lending Act: A Regulation for All Banks” webinar. This webinar will focus on: The meaning of the all-in “military” APR Other terms that are prohibited in covered loans The types of loans covered How and where to identify covered borrowers How to provide… Read More
Supreme Court Affirmation of Hawkins Case Raises More Questions Than It Answers
Posted in Fair LendingOn March 22, 2016, the Supreme Court of the United States issued an order in Hawkins v. Community Bank of Raymore. An evenly divided Court affirmed without issuing an opinion, thereby resolving the Hawkins case but leaving open the proper interpretation of the Equal Credit Opportunity Act (ECOA), failing to resolve a circuit split between… Read More
House Votes to Nix Indirect Auto Bulletin and Expand QM
Posted in CFPB, Fair Lending, Indirect Auto Lending, MortgageThe U.S. House of Representatives passed legislation on November 18, 2015, that would revoke the CFPB’s guidance on indirect auto lending and expand the qualified mortgage rule’s safe harbor. The Reforming CFPB Indirect Auto Financing Guidance Act, H.R. 1737, “[d]eclares without force or effect” the CFPB’s Bulletin 2013-02 (Indirect Auto Lending and Compliance with the… Read More
#ThrowbackThursday: CFPB Fair Lending Guidance for Indirect Auto Lenders—It’s Not Just About Cars
Posted in CFPB, Fair Lending, Indirect Auto LendingIn June 2013, Morrison & Foerster published the client alert “CFPB Fair Lending Guidance for Indirect Auto Lenders—It’s Not Just About Cars.” Summary: Several weeks ago, the CFPB issued a fair lending guidance bulletin (“Bulletin”) directed at financial institutions that make indirect automobile loans. While the Bulletin thus far has not attracted widespread public attention,… Read More
CFPB Brings Long-Anticipated First Redlining Enforcement Action – New Approach to Redlining Analysis Is Put into Action
Posted in CFPB, Enforcement Actions, Fair Lending, MortgageOn September 24, 2015, the CFPB and DOJ announced a joint action against Hudson City Savings Bank for allegedly discriminatory redlining practices from 2009 through 2013 in certain neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania in violation of the Equal Credit Opportunity Act and the Fair Housing Act. Over the past few months,… Read More
CFPB Overestimates Potential Discrimination, Documents Show
Posted in Auto Lending, CFPB, Disparate Impact, Fair LendingMorrison & Foerster Of Counsel Joe Rodriguez was quoted in the American Banker article, “CFPB Overestimates Potential Discrimination, Documents Show.” Read the article here (by subscription only).
#ThrowbackThursday: Interagency Fair Lending Guidance: A First Step, but in the Right Direction?
Posted in CFPB, Enforcement Actions, Fair Lending, MortgageIn October 2013, Morrison & Foerster published the client alert “Interagency Fair Lending Guidance: A First Step, but in the Right Direction?”. To read the alert, click here.