Consumer advocates are largely pleased with the proposal while lenders sounded alarms. The CFPB acknowledged that the data collection will prompt significant costs.
A recent coordinated action by the DOJ and OCC against an Atlanta-based mortgage lender for redlining practices appears to be a harbinger of things to come under the Biden administration.
The companies urged the CFPB to state that disparate impact applies to business models that use AI and to clarify when a disparity is large enough to support a claim of discrimination.
The bureau has clarified that prohibitions against discrimination found in the Equal Credit Opportunity Act and Regulation B include bias against sexual orientation and gender identity.
The Hartford, CT-based firm is accused of using unlicensed employees to engage in mortgage origination activities in violation of the Truth in Lending Act. The bureau is seeking injunctions against the defendants, as well as damages, redress and penalties.
One of the biggest issues mortgage lenders will face is implementing changes to the general qualified-mortgage rule, which has a mandatory compliance date of July 2021.
Industry groups and consumer advocates have asked the CFPB to provide guidance on how lenders can affirmatively advertise to disadvantaged groups while staying in compliance with fair lending laws and regulations.
Rep. Maxine Waters urges CFPB leadership not to finalize any “midnight” regulations; Upstart receives no-action letter; CFPB brings lawsuits against online lender LendUp Loans and debt-relief service provider DMB.
The CFPB halts reorganization of its supervision, enforcement and fair lending division; the bureau refuses to rescind a policy regarding credit reporting agencies.
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