Fair Lending

FTC Announces $10 Million Settlement with Illinois-Based Automotive Group

The Illinois Attorney General and the FTC announced a settlement that requires North American Automotive Services Inc., also known as Edward Napleton Automotive Group (Napleton), to pay $10 million to resolve allegations dealerships charged illegal fees. The settlement was filed with a complaint alleging Napleton dealerships illegally charged consumers for unwanted “add-ons,” discriminated against Black customers [...]

April 4th, 2022|

CFPB Extends Protections to Target Consumer Finance Discrimination

The Consumer Financial Protection Bureau (CFPB) issued a release on March 16, 2022, announcing modifications to its supervisory operations that expand its monitoring of  discriminatory lending and servicing practices.  The CFPB stated that it “will scrutinize discriminatory conduct that violates the federal prohibition against unfair practices” at banks and non-bank companies across the U.S. The [...]

March 18th, 2022|

CFPB Comments on Proposed Appraisal Standard Changes as Regulatory Focus on Appraisals Heightens

The Consumer Financial Protection Bureau (CFPB) expressed in a February 4, 2022, blog post its concern that some appraisers may not be aware of the non-discriminatory laws affecting the appraisal industry.  Further, the CFPB opined that The Appraisal Foundation (TAF), a non-governmental entity that sets appraisal standards, has not sufficiently addressed discriminatory prohibitions in its [...]

February 22nd, 2022|

Justice Department Announces New Initiative to Combat Redlining and Announces Settlement with Trustmark National Bank

The U.S. Department of Justice is launching a nationwide Combatting Redlining Initiative  to combat discriminatory lending practices, Attorney General Merrick Garland said on Friday. Garland said the illegal practice of "redlining," or avoiding lending to minority neighborhoods, remained a persistent problem, and the federal government was devoted more resources to identifying it and punishing lenders. [...]

October 22nd, 2021|

Cadence Bank Settles with DOJ, OCC Over Lending Discrimination Allegations

The Justice Department has announced a settlement with Houston-based Cadence Bank to resolve allegations that the bank engaged in lending discrimination by ‘redlining’ predominantly Black and Hispanic neighborhoods in the Houston area. The Department alleged that the bank engaged in redlining between 2013 and 2017 by avoiding providing loans and other home mortgage services in majority-Black [...]

September 1st, 2021|

HUD Issues Charge of Discrimination Against Mortgage Modification Company

The U.S. Department of Housing and Urban Development (HUD) recently charged a  California business for allegedly targeting Hispanic homeowners with illegal and discriminatory mortgage modification services.  HUD said that The House Lawyer, based in Redwood City, California, collected fees from Hispanic borrowers for loan modification services prior to completing the services, a violation of California law, while [...]

May 17th, 2021|

CFPB Rescinds 2020 Policy Statements Issued Due to COVID-19

On March 31, 2021, the Consumer Financial Protection Bureau (CFPB) rescinded seven recent policy statements and one bulletin in an effort to ensure compliance with consumer protection laws and reinforce its supervisory and enforcement authority. These rescissions went into effect April 1, 2021. The policy statements were designed to provide flexibility to financial institutions that faced [...]

April 7th, 2021|

CFPB Signals Discrimination Based on Sexual Orientation or Gender Identity is Illegal

On March 9, 2021, the Consumer Financial Protection Bureau (CFPB or Bureau) issued an Interpretive Rule that the prohibitions against sex discrimination in the Equal Credit Opportunity Act (ECOA) and Regulation B encompass sexual orientation discrimination and gender identity discrimination. When published, the rule will have immediate effect. The new interpretive rule follows a landmark Supreme Court [...]

March 10th, 2021|

Aligning Fair Lending Testing with Why Consumers Withdraw their Mortgage Applications

Download This Article Withdrawn applications reflect an increasing proportion of non-approved first-lien mortgage applications as denials have become relatively less numerous. A decade ago, based on 2009 HMDA data, denials comprised just over one-half (53 percent) of non-approved first-lien applications. Denials fell to less than one-third (31 percent) of non-approvals a decade later. Over the [...]

February 18th, 2021|

Aligning Fair Lending Testing with Why Consumers Withdraw their Mortgage Applications

Banks and non-depository mortgage companies engage ADI to evaluate Fair Lending risk relative to consumer outcomes from their underwriting activities. We endeavor to align our solutions with the reasons consumers withdraw prior to an approval/denial decision based on the merits.   In the past several years, the proportion of non-approved HMDA-reported applications that were denied based on review of an applicant’s credit [...]

February 9th, 2021|