1. THE CONSUMER FINANCIAL PROTECTION BUREAU: FAIR LENDING AT WORK
June 2012
THE CONSUMER FINANCIAL PROTECTION BUREAU:
FAIR LENDING AT WORK
Tim Lambert
Senior Counsel, Office of Fair Lending and Equal Opportunity
Consumer Financial Protection Bureau
Note: This document was used in support of a live discussion. As such, it does not necessarily express the entirety of that discussion nor the relative emphasis of topics.
FAIR LENDING AT WORK

2. THE DODD–FRANK ACT CREATED THE OFFICE OF FAIR LENDING AND EQUAL OPPORTUNITY
“fair, equitable, and nondiscriminatory access to credit for consumers.” DFA § 1002(13).
Dodd-Frank defines “Fair Lending” as:
Provide oversight and enforcement of fair lending laws enforced by the Bureau
Coordinate efforts with Federal agencies and State regulators
Work with the industry, fair lending, civil rights, consumer and community advocates to promote fair lending compliance and education
Report to Congress on the efforts of CFPB to fulfill its fair lending mandate. DFA § 1013(c).
Dodd-Frank mandates the creation of an Office of Fair Lending and Equal Opportunity with the following specified functions:
FAIR LENDING AT WORK

3. CFPB’S KEY FAIR LENDING LAWS
The ECOA prohibits creditors from discriminating in any aspect of a credit transaction against any applicant on the basis of race, color, religion, national origin, sex, marital status, age, receipt of income from any public assistance program, or exercising in good faith a right under the Consumer Credit Protection Act.
EQUAL CREDIT OPPORTUNITY ACT
HMDA requires lenders to report individual mortgage loan data, including data on race, ethnicity, and sex.
HOME MORTGAGE DISCLOSURE ACT
FAIR LENDING AT WORK

4. CFPB ADOPTS THE DISPARATE IMPACT DOCTRINE
WAYS TO PROVE DISCRIMINATION UNDER ECOA
OVERT DISCRIMINATION
DISPARATE TREATMENT
DISPARATE IMPACT
FAIR LE NDING AT WORK

5. OFFICE OF FAIR LENDING FUNCTIONS HORIZONTALLY WITHIN CFPB
Consumer Response
Discrimination Complaint Processing Procedures
Discrimination Complaint Analysis
Consumer Education & Engagement
Consumer Education
Special Populations Work
Research, Markets & Regulations
Rulemaking
The Markets Teams
Research
Supervision
Fair Lending Scoping
Fair Lending Exams
Enforcement
Fair Lending Investigations
Fair Lending Litigation
External Affairs
Industry Outreach
Civil Rights, Consumer, and Community Group Outreach
OFFICE OF FAIR LENDING AND EQUAL OPPORTUNITY
FAIR LENDING AT WORK

6. CONSUMER RESPONSE – DISCRIMINATION COMPLAINTS
CFPB is receiving complaints regarding these products:
Visit to submit a complaint
Or call CFPB
FAIR LENDING AT WORK

7. Financial Empowerment
CONSUMER EDUCATION AND ENGAGEMENT
Financial Education
Provide targeted educational content
Example: “Credit Discrimination is Illegal” Brochure
Financial Empowerment
Enhance access to and knowledge of financial products and services among lower-income consumers
Engaging consumers and empowering them to take control of their financial lives are top priorities for the CFPB.
The Bureau aims to provide consumers with the information they need when they need it, so that they can achieve their own financial goals.
OLDER AMERICANS
SERVICEMEMBERS
STUDENTS
FAIR LENDING AT WORK

8. KNOW BEFORE YOU OWE
FAIR LENDING AT WORK

9. FAIR LENDING RESEARCH RESEARCH TEAM MARKETS TEAMS
MORTGAGE & HOME EQUITY MARKETS
CARD AND PAYMENTS MARKETS
INSTALLMENT & LIQUIDITY LENDING
DEPOSITS, COLLECTIONS & CREDIT INFORMATION
RESEARCH TEAM
Create methodologies and provide analytical support for supervisory exams and enforcement actions
Provide research support for studies such as the §1077 Student Lending Report
FAIR LENDING AT WORK

10. FAIR LENDING REGULATIONS
Amend ECOA – Reg B
Small Business Data Collection
Amend HMDA – Reg C
Revisions to Reg C
Amend TILA – Reg Z
abusive or unfair lending practices that promote disparities among consumers of equal credit worthiness but of different race, ethnicity, gender, or age
FAIR LENDING AT WORK

11. NONBANK BANK FAIR LENDING SUPERVISION CONSUMER FINANCE MARKET Banks
Payday, mortgage and private student loans
“Larger Participants” in nonbank markets
Covered persons that pose risks to consumers
Banks
Thrifts
Credit Unions
BANK
CONSUMER FINANCE MARKET
FAIR LENDING AT WORK
SENSITIVE AND PRE-DECISIONAL FOR INTERNAL USE ONLY

12. Risk FAIR LENDING RISK FACTORS Incentives Reliance on Third Parties
Unusual Criteria
Discretion
Incentives
Reliance on Third Parties
Weak Compliance Management System
FAIR LENDING AT WORK

13. KEY AREAS FOR FAIR LENDING EXAMINATIONS
Fair Lending Supervision & Enforcement
Mortgage Origination
Mortgage Servicing
Auto Loans
Student Loans
Credit Cards
Small Business Loans
FAIR LENDING AT WORK

14. FAIR LENDING ENFORCEMENT
Independent litigation authority and referral obligation under ECOA
Coordination with the other federal enforcement agencies and state regulators
DOJ, FTC, HUD and State AGs
Civil Investigative Demands and Administrative Hearing Authority
FAIR LENDING AT WORK

15. PROMOTING FAIR LENDING COMPLIANCE AND EDUCATION AMONG:
FAIR LENDING OUTREACH
PROMOTING FAIR LENDING COMPLIANCE AND EDUCATION AMONG:
PRIVATE INDUSTRY
CONSUMER ADVOCATES
COMMUNITY ADVOCATES
CIVIL RIGHTS GROUPS
FAIR LENDING GROUPS
FAIR LENDING AT WORK

16. CFPB AND THE OFFICE OF FAIR LENDING
Tell your Story
Submit a complaint
Ask CFPB
Notice and Comment
Blog
WORKING FOR
YOU
WORKING WITH
YOU
WE WANT TO HEAR FROM YOU!
FAIR LENDING AT WORK