The CFPB on Wednesday issued its final rule modifying the Equal Credit Opportunity Act (ECOA) regulations, which it says will provide added flexibility for mortgage lenders in the collection of consumer ethnicity and race information. Currently, the ECOA restricts lenders' ability to ask consumers about race, religion, nationality or sex except as it relates to the required collection [...]
The City of Philadelphia announced (HousingWire) on May 15, 2017 that it will sue one of the nation’s largest banks, Wells Fargo, for discriminatory lending practices against its minority residents which, in turn, caused harm to the City. This suit will be a major test of a recent ruling by the U.S. Supreme Court (Bank [...]
Can a city, or potentially other governmental entities, sue lenders over their discriminatory lending practices under the Fair Housing Act? On May 1, 2017, the U.S. Supreme Court said “yes,” but with the following conditions: The city must be an “aggrieved person” within the meaning of the Fair Housing Act; The alleged harm must be [...]
On Tuesday, the Consumer Financial Protection Bureau (CFPB) released its annual Fair Lending report. In this report, the CFPB summarizes its supervisory actions, rulemaking, guidance and other activities conducted during the 2016 calendar year. Following are some of the observations that are noted in the report related to the agency’s supervisory actions for 2016: Many [...]
On March 23, 2017, the Federal Reserve Board (FRB) announced an enforcement action with Santander Holdings USA, Inc. and its majority-owned subsidiary, Santander Consumer USA, Inc. This action will require Santander to strengthen its compliance risk management program and improve the oversight by the Board and senior management of the lender’s subprime auto-lending unit. While [...]
The U.S. Department of Housing and Urban Development (HUD) announced Friday, March 9th, that it has reached an agreement with Alpine Bank & Trust resolving allegations that the Northern Illinois-based lender discriminated against African American and Hispanic mortgage applicants. The agreement stems from a complaint filed with HUD by HOPE Fair Housing Center of Wheaton, Illinois, [...]
JPMorgan Chase announced (USA Today, 1/18/2017) that it has reached an agreement with the U.S. government to pay $55 million to settle allegations that the firm violated Fair Lending laws. According to the lawsuit, the government alleged that, from 2006 through 2009, the bank's wholesale mortgage brokers charged African American and Hispanic borrowers higher interest rates than white, [...]
The Justice Department filed a lawsuit against KleinBank on January 13th, alleging that KleinBank engaged in unlawful “redlining” of majority-minority neighborhoods in the Minneapolis-St. Paul metropolitan area. The lawsuit, filed in the U.S. District Court for the District of Minnesota, alleges that from 2010 to at least 2015, the bank structured its residential mortgage lending [...]
On December 28, 2016, the Department of Justice (DOJ) announced a settlement reached with two Ohio-based banks regarding allegations of redlining. The complaint alleges that the two banks – Union Savings Bank and Guardian Savings Bank – avoided lending to and opening branches near residents in predominantly African-American neighborhoods for the period of 2010 through [...]
On Friday, the Consumer Financial Protection Bureau (CFPB) set out its top Fair Lending priorities for 2017: Redlining; Mortgage and Student Loan Servicing; and Small Business Lending. The CFPB also marked the 40th anniversary of the Equal Credit Opportunity Act (ECOA) and noted its successes during the last five years: (1) More than $400 million [...]
