News & Analysis as of

Equal Credit Opportunity Act Regulation B

Ballard Spahr LLP

Judge refuses to dismiss most reverse discrimination counts in case against Colony Ridge

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Saying that reverse redlining is a form of discrimination, the U.S. District Court for the Southern District of Texas has refused to dismiss a discrimination case alleging that Texas developer Colony Ridge specifically...more

Ballard Spahr LLP

NCLC Asks CFPB to Consider Residential Leases as Credit for Specific Purposes

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The National Consumer Law Center is asking the CFPB, by way of a petition, for rulemaking that is long on policy arguments but woefully short on legal support, as we note below, to define residential leases as “credit” under...more

Ballard Spahr LLP

Kentucky Court Grants a Stay of Case Pending a Decision in the Texas Small Business Lending Lawsuit

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On August 7, 2024, the U.S. District Court for the Eastern District of Kentucky granted the CFPB’s motion to stay the small business lending rule litigation before the court until resolution of the similar case pending in the...more

Husch Blackwell LLP

Preview of a Post-Chevron World: The Seventh Circuit Upholds Regulation B's Discouragement Prohibition as Consistent with ECOA

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With Loper Bright’s recent death blow to Chevron deference, some commentators have been predicting substantial constriction of the administrative state and the narrowing or limiting of the powers of federal regulators. For...more

Ballard Spahr LLP

7th Circuit Holds ECOA Protections Apply to Prospective Applicants

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In a major win for the CFPB, in CFPB v. Townstone Financial, a panel of the U.S. Court of Appeals for the Seventh Circuit (7th Circuit) recently held that the Regulation B provision prohibiting discrimination under the Equal...more

Goodwin

Seventh Circuit Revives CFPB’s ECOA Action Alleging Discrimination Against Prospective Applicants Against Nonbank Lender

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On July 11, the Seventh Circuit held that the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq. (ECOA) authorizes the imposition of liability for the discouragement of prospective applicants. See CFPB v. Townstone...more

Orrick, Herrington & Sutcliffe LLP

7th Circuit reverses district court, holds ECOA prohibits discouragement of prospective applicants for credit

On July 11, the U.S. Court of Appeals for the Seventh Circuit reversed a district court’s decision to dismiss the CFPB’s claims that a Chicago-based nonbank mortgage company and its owner violated ECOA by engaging in...more

Troutman Pepper

Seventh Circuit Reverses District Court Decision, Expands ECOA to Include Prospective Applicants

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As discussed here, on February 3, 2023, an Illinois federal court dismissed a case brought by the Consumer Financial Protection Bureau (CFPB or Bureau) in 2020 against Townstone Financial, Inc., a Chicago mortgage lender, for...more

Orrick, Herrington & Sutcliffe LLP

FTC provides its 2023 ECOA activities to CFPB

On February 12, the FTC provided the CFPB with an annual summary of its 2023 enforcement, research and policy development, and educational-related initiatives on ECOA, as Dodd-Frank allows the Commission to enforce ECOA and...more

Ballard Spahr LLP

Trade group for providers of commercial sales-based financing files lawsuit challenging CFPB final small business lending rule

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Revenue Based Finance Coalition (RBFC), a trade group whose members include non-banks that provide sales-based financing to businesses, filed a lawsuit last week against the CFPB in a Florida federal district court...more

Troutman Pepper

9 Consumer Finance Issues to Note From CFPB Report

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In July, the Consumer Financial Protection Bureau published a report highlighting various unfair, deceptive, and abusive acts or practices it claims to have uncovered during its supervisory examinations from July 2022 to...more

Ballard Spahr LLP

Oral Arguments Held in CFPB v. Townstone Financial Case

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On December 8, 2023, oral arguments were held before a three judge panel of the U.S. Court of Appeals for the Seventh Circuit in the CFPB v. Townstone Financial case, in which the CFPB alleges that Townstone Financial, a...more

Goodwin

The Justice Department and Consumer Financial Protection Bureau Issue Joint Statement Focused on Antidiscrimination in Lending...

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Last month, the Justice Department (DOJ) and the Consumer Financial Protection Bureau (CFPB) issued a joint statement that reminded financial institutions that all credit applicants are protected from discrimination on the...more

Hudson Cook, LLP

CFPB Fines Major Bank $26M for Allegedly Discriminating Against Armenian Americans

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On November 8, 2023, the Consumer Financial Protection Bureau announced that one of the nation's largest banks (the "Bank") agreed to settle charges that the Bank engaged in a pattern or practice of discriminating against...more

Ballard Spahr LLP

Republican Senators urge CFPB and DOJ to retract joint statement on consideration of immigration status under ECOA

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A group of eleven Republican Senators who are members of the Senate Banking Committee have sent a letter to CFPB Director Rohit Chopra and Attorney General Merrick Garland to urge the CFPB and DOJ to retract the joint...more

Ballard Spahr LLP

DOJ Redlining Consent Order With Ameris Bank

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Recently the U.S. Department of Justice (DOJ) entered into a proposed consent order with Ameris Bank to resolve allegations of redlining from 2016 through 2021 in majority Black and Hispanic areas in the Bank’s Jacksonville,...more

Saul Ewing LLP

CFPB Issues Guidance on Use of AI in Credit Decisioning

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In September, the Consumer Financial Protection Bureau issued guidance on compliance with the Equal Credit Opportunity Act’s adverse action notice requirements for lenders utilizing artificial intelligence in their credit...more

Husch Blackwell LLP

CFPB and DOJ Joint Statement Signals Increased Fair Lending Scrutiny for Noncitizen Borrowers

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The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) have issued a new joint statement focused on anti-discrimination in lending practices as they relate to noncitizens. This guidance not only...more

Ballard Spahr LLP

DOJ Settles Redlining Claims in Rhode Island

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The Department of Justice (DOJ) announced a settlement agreement with Washington Trust Company, of Westerly (WTC) to resolve claims that WTC redlined majority Black and Hispanic neighborhoods in Rhode Island....more

Sheppard Mullin Richter & Hampton LLP

CFPB, DOJ Joint Statement: Financial Institutions May Not Use Immigration Status to Illegally Discriminate Against Credit...

On October 12, the CFPB and DOJ issued a joint statement that reminds financial institutions that all credit applicants are protected from discrimination on the basis of their national origin, race, and other characteristics...more

Bradley Arant Boult Cummings LLP

Creditors Should Review Their Use of Immigration Status When Accepting and Evaluating Applications

On October 12, the Consumer Financial Protection Bureau (CFPB) and Department of Justice (DOJ) issued a joint statement emphasizing the risk associated with considering an applicant’s immigration status when making credit...more

Ballard Spahr LLP

CFPB and DOJ issue joint statement on consideration of immigration status under ECOA but omit clear guidance

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The Consumer Financial Protection Bureau and Department of Justice have issued a joint statement regarding “the potential civil rights implications of a creditor’s consideration of an individual’s immigration status under the...more

Troutman Pepper

Federal Agencies Finally Weigh in on Immigration Status in Credit Underwriting

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Last week, the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) (collectively, the agencies) issued a joint statement on the subject of creditors’ use of immigration status for eligibility...more

Mintz - Antitrust Viewpoints

Financial Protection and Autonomous Systems: Recent CFPB Actions Focused on AI — AI: The Washington Report

Welcome to this week's issue of AI: The Washington Report, a joint undertaking of Mintz and its government affairs affiliate, ML Strategies. The accelerating advances in artificial intelligence (“AI”) and the practical,...more

Jones Day

CFPB Guidance Puts Creditors on Notice About AI-Involved Adverse Actions

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Recent Consumer Financial Protection Bureau ("CFPB") guidance reiterates that creditors must provide consumers with accurate and individualized explanations for adverse actions—a task made more difficult by the complexity of...more

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