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Andrea K. Mitchell quoted in Inside Mortgage Finance article, “CFPB considers disparate-impact rulemaking that attorneys say could have significant impact”

Inside Mortgage Finance

Andrea K. Mitchell

Andrea K. Mitchell was quoted on October 25 in an Inside Mortgage Finance article, “CFPB considers disparate-impact rulemaking that attorneys say could have significant impact,” which discussed the Consumer Financial Protection Bureau’s possible rulemaking on the use of the disparate impact theory under the Equal Credit Opportunity Act. The article stated, “In the CFPB’s fall rulemaking agenda update posted last week, the agency said it is considering future activity with regard to specific areas of consumer financial law, such as ‘the requirements of the ECOA concerning the disparate-impact doctrine.’ The CFPB expects to issue a more comprehensive statement to reflect such activity by spring 2019.”

Mitchell noted, “Making a rule to define if and how the disparate-impact theory is applied under ECOA would be a very interesting change. If the CFPB issues a rule on disparate impact, there are far-reaching implications, because that applies to not only the federal agencies, but even to judicial branches, which could use the CFPB interpretation of ECOA and Reg B in the availability of disparate impact.”

The article also stated, “If the CFPB does limit the use of the disparate-impact analysis, lenders would only need to be aware of the risk of disparate treatment, which is easier to manage because it results from discriminatory behavior. Disparate-impact risk, in contrast, can arise from many unintended areas, even from a neutral business model. Mitchell added, “Mortgage lenders, in particular, should not relax too much if the CFPB rulemaking drops disparate impact from ECOA. That’s because Inclusive Communities still allows disparate-impact claims under the FHA. There are state anti-discrimination laws noting more than a dozen state attorneys general earlier said they won’t refrain from using a disparate-impact analysis when enforcing fair lending laws.”

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