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Financial Services Law Insights and Observations

FTC provides 2021 ECOA summary to CFPB

Federal Issues FTC CFPB ECOA Regulation B Enforcement Fair Lending DOJ Federal Reserve HUD Disparate Impact

Federal Issues

On February 23, the FTC announced it recently provided the CFPB with its annual summary of activities related to ECOA enforcement, focusing specifically on the Commission’s activities with respect to Regulation B. The summary discussed, among other things, the following FTC enforcement, research, and policy development initiatives:

  • The FTC filed a joint amicus curiae brief with the CFPB, DOJ, and Federal Reserve Board in the U.S. Court of Appeals for the Seventh Circuit last December asserting that the term “applicant,” as used in ECOA and its implementing rule, Regulation B, includes both those currently seeking credit as well as persons who have sought and have received credit (i.e., current borrowers). (Covered by InfoBytes here.)
  • Last October, the FTC released a staff report, Serving Communities of Color, that discusses the Commission’s enforcement and outreach efforts related to the impact of fraud on majority Black and Latino communities. One of the studies examined disparities related to payment methods received from consumers who live in communities of color compared to consumers who live in majority White communities. (Covered by InfoBytes here.)
  • The FTC’s Military Task Force continued to work on military consumer protection issues, including military consumers’ “rights to various types of notifications as applicants for credit, including for adverse action, and information about the anti-discrimination provisions, in the ECOA and Regulation B.”
  • The FTC continued to participate in the Interagency Task Force on Fair Lending, along with the CFPB, DOJ, HUD, and federal banking regulatory agencies. The Commission also continued its participation in the Interagency Fair Lending Methodologies Working Group to “coordinate and share information on analytical methodologies used in enforcement of and supervision for compliance with fair lending laws, including the ECOA, among others.”

The summary also highlighted FTC ECOA enforcement actions, business and consumer education efforts on fair lending issues, as well as blog posts discussing discrimination and potential bias affecting protected classes and the risks of using artificial intelligence in automated decision-making.