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  • HUD says social media platform's advertising violates FHA

    Federal Issues

    On March 28, HUD announced that it charged a world-wide social media platform with violating the Fair Housing Act (FHA) by allowing advertisers to exclude certain protected classes from viewing housing-related ads. According to the charges, the social media platform collects information about its users and sells advertisers the ability to target housing-related advertisements to people who “share certain personal attributes and/or are likely to respond to a particular ad.” Specifically, HUD alleges that the platform first allows advertisers to use tools to select attributes of users who they would like to include or exclude from viewing their advertisements. These attributes include attributes such as, “women in the workforce,” “foreigners,” “Puerto Rico Islanders,” or “Christian.” HUD also alleges that the platform allows advertisers to draw a “red line” around specific areas on a map to exclude people who live there from seeing a particular ad. In a subsequent phase, HUD alleges that the platform groups users by shared attributes to create a target audience most likely to engage with the ad, even if the advertiser would prefer a broader audience, which, according to HUD, inevitably creates “groupings defined by their protected class.” HUD alleges that the data collection and targeted ad processes function “just like an advertiser who intentionally targets or excludes users based on their protected class” in violation of the FHA. HUD is seeking an injunction, damages for any aggrieved persons, and civil money penalties against the platform.

    Federal Issues HUD Fair Lending Fair Housing Act

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  • OCC fines national bank $25 million for violating Fair Housing Act

    Lending

    On March 19, the OCC announced that a national bank has agreed to pay a $25 million civil money penalty to resolve alleged violations of the Fair Housing Act. According to the OCC’s consent order, (i) from August 2011 to April 2015, the bank did not properly train loan officers about available mortgage discounts under its Relationship Loan Program (RLP); (ii) from August 2011 to November 2014, the bank failed to provide explicit instructions within their written guidelines that employees should offer those discounts to all eligible customers; and (iii) from August 2011 to November 2014, the bank did not require loan officers to document the reason for a customer’s rejection. Moreover, according to the OCC, the bank did not require loan officers to inform customers about potential mortgage discounts from August 2011 to January 2015. As a result, the OCC stated that certain borrowers allegedly did not receive RLP benefits for which they were eligible and were adversely affected on the basis of their race, color, national origin, and/or sex. The bank—which did not admit nor deny the allegations and self-reported the problems in 2015—initiated and has nearly completed a reimbursement plan, which will deliver roughly $24 million in restitution to the approximately 24,000 borrowers who may have missed out on the appropriate RLP benefit.

    Lending OCC Fair Lending Fair Housing Act Enforcement

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