Fair Lending and Fair Servicing
A firm of preeminent repute in the fair lending space.Chambers USA
Practice Overview
The major federal fair lending laws — the Equal Credit Opportunity Act and the Fair Housing Act — date to the 1960s and 1970s, but over the past decade federal and state agencies have renewed their focus on enforcing them. The creation of the Consumer Financial Protection Bureau and its emphasis on fair lending and servicing, emerging Department of Housing and Urban Development rules, continued enforcement by the Department of Justice, Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, along with the growing emphasis by state attorneys general have created a prolonged period of tight government scrutiny of fair lending and servicing.
Lenders’ use of alternative data and emerging technologies like artificial intelligence, volatile economic conditions, innovative loan products and servicing practices, and data proliferation have further intensified the spotlight on compliance with fair lending and servicing laws.
Buckley, which Chambers USA calls “a firm of preeminent repute in the fair lending space,” has led the way in defending the nation’s top banks, mortgage lenders, auto lenders, credit card issuers, fintech companies, and other consumer finance companies in traditional and emerging areas of fair lending and fair servicing. We are well-positioned to handle the known issues, and more importantly, anticipate future trends because of our knowledge of this area — which allows us to prepare our clients accordingly.
Our team of experienced fair lending and servicing attorneys has been directly involved in the vast majority of major developments in fair lending and servicing policy, regulation, enforcement, and litigation over the years, and we regularly rely upon this insight to assist our clients in handling traditional issues and novel challenges.
Our deep understanding of fair lending and servicing issues and practical advice engender our clients’ trust, and a history of success in representing clients in complex matters has put our Fair Lending and Servicing practice at the top of list when potential issues arise. The attorneys who are part of Buckley’s Fair Lending and Servicing practice routinely represent and advise clients on a variety of significant matters, including:
- Representing financial services clients in government enforcement actions, investigations, and other administrative proceedings
- Counseling clients through federal and state agency fair lending and servicing examinations
- Representing clients in complex civil litigation involving complex regulatory issues
- Conducting risk assessments and regulatory compliance reviews, including providing both qualitative and quantitative support drawing on the firm’s experience in Bayesian Improved Surname Geocoding (BISG) proxy methodology
- Providing comprehensive regulatory counseling and compliance advice to mitigate fair lending risk
- Designing and implementing forward-looking fair lending compliance and monitoring programs, including those in emerging areas such as the alternative financial services space and the use of technology and innovation in lending
- Advising on issues related to the intersection of emerging technologies and innovation with fair lending and servicing laws and regulations, including alternative data, artificial intelligence, and machine learning
From redlining and steering allegations to pricing, underwriting, and loan servicing discrimination claims, we have represented clients in hundreds of fair lending and servicing matters initiated by federal agencies, state regulators, and private parties, as well as in self-initiated reviews. Representative matters handled by attorneys in Buckley’s Fair Lending and Servicing practice include:
- Representing numerous entities in concurrent investigations and enforcement actions by federal and state regulators, including the DOJ, HUD, CFPB, prudential banking regulators, and state attorneys general, related to allegations of discriminatory lending practices
- Representing numerous banks and nonbanks in escalated state and federal government supervisory activity regarding origination and servicing practices
- Representing financial institutions in housing discrimination complaints filed by individuals and consumer advocacy groups with local and state civil rights commissions and HUD, including complaints referred to DOJ
- Actively advising lenders on fair lending risk from digital media, marketing, and advertising
- Conducting fair lending and fair servicing risk assessments for financial institutions, including entities offering mortgages, auto loans, credit cards, student loans, and personal loans
- Representing bank and nonbank indirect auto creditors in both public and nonpublic settlements with the CFPB and the DOJ over alleged fair lending violations
- Representing banks in putative class actions and complex litigation alleging discrimination in various loan products, including allegations of redlining and discrimination in pricing and underwriting
- Representing specialty lenders in multi-agency fair lending supervision, investigations, and internal reviews
- Defending numerous financial institutions in fair lending protests to transactional applications filed with the federal banking agencies
- Defending complex litigation brought by several municipalities alleging discriminatory lending practices with negative impacts to the municipality
A firm of preeminent repute in the fair lending space.Chambers USA
Articles
Special Alert: DOJ settles claims of algorithmic bias
On June 21, the United States Department of Justice announced that it had secured a “groundbreaking” settlement resolving claims brought against a large social media platform for allegedly engaging in discriminatory advertising in violation of the Fair Housing Act. The settlement is one of the...
Special Alerts"9th Circ. FCRA ruling highlights furnishers' role in disputes" by Sasha Leonhardt and Cierra D. Newman (Law360)
In recent years, consumers have raised a variety of arguments to dispute negative information on their consumer reports — in some instances, raising not only factual questions about the existence or amount of a debt, but also more complex questions about whether a debt is legally permitted under...
ArticlesSpecial Alert: CFPB proposes small business loan data collection regime
Over a decade ago, Congress enacted an amendment to the Equal Credit Opportunity Act that directed the Consumer Financial Protection Bureau to implement a new regime for small business loan data collection similar to the regime that exists in the mortgage industry. Last week, a month before a court...
Special Alerts"Fairness gone viral: Fair lending considerations for financial institutions amid Covid-19" by Caroline M. Stapleton (American Bar Association Business Law Today)
The COVID-19 pandemic has had a disproportionate impact on certain protected classes in the United States, including, in particular, minority populations. Non-white populations have seen higher hospitalization rates, more deaths, and higher unemployment numbers over the past six months as compared...
ArticlesSpecial Alert: HUD finalizes new disparate impact regulation
The Department of Housing and Urban Development earlier this month issued a final disparate impact regulation under the Fair Housing Act (Final Rule). HUD’s new Final Rule is intended to align its disparate impact regulation, adopted in 2013 (2013 Rule), with the Supreme Court’s 2015 ruling in...
Special AlertsSpecial Alert: CFPB takes first-ever agency redlining action against nonbank lender
On July 15, the Consumer Financial Protection Bureau filed a complaint against a Chicago-based nonbank mortgage company alleging fair lending violations predicated, in part, on statements made by the company’s owner and other employees during radio shows and podcasts from 2014 through 2017. The...
Special AlertsSpecial Alert: OCC issues CRA final rule
On May 20, the Office of the Comptroller of the Currency announced a final rule to modernize the regulatory framework implementing the Community Reinvestment Act. The final rule marks the culmination of a three-year effort led by the Treasury Department to revamp the CRA and arrives exactly six...
Special Alerts"Ruling on anti-hacking law may guide fair lending tests" by Jeffrey P. Naimon (Law360)
Regulators, consumer groups, academics and private litigants are grappling with the fair lending implications of the credit models powering the explosive growth in online lending by banks and financial technology firms. The U.S. District Court for the District of Columbia in late March concluded...
ArticlesSpecial Alert: OCC and FDIC issue CRA modernization proposal
On December 12, 2019, the OCC and the FDIC jointly issued a notice of proposed rulemaking (NPR) to modernize the regulatory framework implementing the Community Reinvestment Act. The NPR generally focuses on expanding and delineating the activities that qualify for CRA consideration, providing...
Special Alerts"HUD’s disparate impact proposal clarifies fair lending laws" by Jeffrey P. Naimon (Law360)
The U.S. Department of Housing and Urban Development last month released its long-anticipated proposal to revise its disparate impact rule under the Fair Housing Act. Although the proposal has attracted some criticism from those who believe the proposal would make it more difficult for plaintiffs...
Articles"FHA enforcement: What decreased reliance on the False Claims Act means for FHA lenders and servicers" by Melissa Klimkiewicz (HousingWire)
Top offcials at the U.S. Department of Housing and Urban Development are looking to chart a new course to win back banks that have fled the Federal Housing Administration lending program following a series of multimilliondollar False Claims Act settlements. In the past, HUD has partnered with the U...
Articles"Alternative data and fair lending face off: The relationship is complicated" by Caroline M. Stapleton (Mortgage Compliance Magazine)
Thinking of getting into a relationship with alternative data? You're not alone. Use of "alternate data," a term broadly used to describe consumer information gathered from non-conventional sources, is becoming increasingly attractive to mortgage lenders, their service providers, and even consumers...
Articles"Breaking down (language) barriers: A practical approach to LEP borrowers" by Jessica L. Pollet and Susanna K. Sedrak (Westlaw Journal)
In roughly 5.3 million households in the United States, the head of the house doesn’t speak English as the primary language or has limited ability to understand it.1 But like most individuals seeking full participation in the U.S. economy, those with limited English proficiency need access to...
Articles"Is the CFPB bound by its non-binding guidance? The implications of the PHH due process decision for TRID and other CFPB rules" by Steven R. vonBerg
Predictability and certainty are crucial components of the consumer finance market. Consumers crave it, as do industry participants. A common understanding of legal requirements promotes uniformity in the application of consumer protections and allows lenders, servicers, systems providers,...
Buckley Commentary & AnalysisSpecial Alert: Supreme Court Holds Cities Have Standing Under FHA, But Limits Potential Claims
On May 1, the Supreme Court ruled 5-3 that municipal plaintiffs may be “aggrieved persons” authorized to bring suit under the Fair Housing Act against lenders for injuries allegedly flowing from discriminatory lending practices. However, the Court held that such injuries must be proximately caused...
ArticlesSpecial Alert: Maryland Ruling Opens New Front in Battle Over Bank Partnership Model
On June 23, the Maryland Court of Appeals affirmed a lower court judgment holding that a non-bank entity assisting consumers obtain loans from an out-of-state bank and then repurchasing those loans days later qualifies as a “credit service business” under the Maryland Credit Services Business Act (...
ArticlesSpecial Alert: CFPB's Proposed Rule Regarding Payday, Title, and Certain Other Installment Loans
On June 2, 2016, the CFPB published its proposed rule (the “ Proposed Rule ”) addressing payday loans, vehicle title loans, and certain other installment loans (collectively “covered loans”). This alert summarizes the Proposed Rule and compares the Proposed Rule to the CFPB’s March 26, 2015 outline...
ArticlesThe Impending Impact of Section 1071 and Creeping Consumerism on Equipment Finance
Mitchell Grod authored "The Impending Impact of Section 1071 and Creeping Consumerism on Equipment Finance," which was published in the Winter 2016 issue of the Journal of Equipment Lease Financing. Section 1071 of the Dodd-Frank Act goes beyond consumer lending to regulate business credit. It...
ArticlesCitizen, Soldier, Small Business Owner? Commercial Lending and the Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act, 50 U.S.C.A. § 3901, provides certain protections to military servicemembers regarding their financial obligations. The act applies to virtually every type of debt that a service member may obtain. It provides benefits such as an interest rate cap and procedural...
Articles
News & Blogs
Fed’s Barr raises concerns about AI redlining
On July 18, Federal Reserve Vice Chair for Supervision Michael Barr delivered a speech on adjusting the Fair Housing Act and ECOA in response to the increasing relevance of artificial intelligence. Barr explained how the digital economy offers many great utilizations, such as accessing the...
InfoBytesHighlights from the CFPB’s 2022 fair lending report
On June 29, the CFPB issued its annual fair lending report to Congress which outlines the Bureau’s efforts in 2022 to fulfill its fair lending mandate. Much of the Bureau’s work in 2022 was directed towards unlawful discrimination in the home appraisal industry and addressing redlining. According...
InfoBytesCFPB, FTC, and consumer advocates ask 7th Circuit to review redlining dismissal
The CFPB recently filed its opening brief in the agency’s appeal of a district court’s decision to dismiss the Bureau’s claims that a Chicago-based nonbank mortgage company and its owner violated ECOA by engaging in discriminatory marketing and consumer outreach practices. As previously covered by...
InfoBytesFHFA seeks to codify fair lending oversight
On April 19, FHFA issued a notice of proposed rulemaking (NPRM) to codify several existing practices and programs relating to the agency’s fair lending oversight requirements for the Federal Home Loan Banks and Fannie Mae and Freddie Mac (GSEs). Intended to provide increased public transparency and...
InfoBytesFHFA updates GSE equitable housing finance plans
On April 5, FHFA announced updates to Fannie Mae and Freddie Mac’s (GSEs) equitable housing finance plans for 2023. (See plans here and here .) The updates include adjustments to plans first announced last year (covered by InfoBytes here ), which faced pushback from several Republican senators who...
InfoBytesArkansas amends LO sponsorship licensing requirements
On March 21, Arkansas enacted HB 1439 to clarify the sponsorship process and amend licensing requirements under the state’s Fair Mortgage Lending Act. The amendments modify the definition of a “transitional loan officer license” to mean a license that is issued to an individual who is employed “and...
InfoBytesReal estate brokerage firm settles claims of discriminatory practices
On March 15, the New York attorney general announced a settlement with a real estate brokerage firm to resolve claims that it allegedly discriminated against Black, Hispanic, and other homebuyers of color on Long Island. According to the announcement, the Office of the Attorney General commenced...
InfoBytesHUD restores 2013 discriminatory effects rule
On March 17, HUD announced the submission of a final rule — Reinstatement of HUD’s Discriminatory Effects Standard —which would rescind the agency’s 2020 regulation governing Fair Housing Act (FHA or the Act) disparate impact claims and reinstate the agency’s 2013 discriminatory effects rule...
InfoBytesDOJ, CFPB: Lenders that rely on discriminatory appraisals violate the FHA and ECOA
On March 13, the DOJ and CFPB filed a statement of interest saying that a “lender violates both the [Fair Housing Act (FHA)] and ECOA if it relies on an appraisal that it knows or should know to be discriminatory.” (See also CFPB blog post here .) Pointing out that the case raises important legal...
InfoBytesCFPB publishes HMDA review
On March 3, the CFPB published findings from a voluntary review of the 2015 HMDA Final Rule issued in October 2015, as well as subsequent related amendments that eased certain reporting requirements and permanently raised coverage thresholds for collecting and reporting data about closed-end...
InfoBytes
Press Releases & Announcements
Legal 500 2020 recognizes 21 Buckley attorneys in six practice areas
“Buckley attorneys are incredibly responsive while providing top quality legal services,” is how respondents described the firm in the 2020 edition of Legal 500, which ranked Buckley as a top law firm and recognized it in six categories:
- Corporate Investigations and White ...
The Legal 500 2019 recognizes 17 Buckley attorneys in five practice areas
The Legal 500 once again ranked Buckley as a top law firm and recognized it in five categories:
- Corporate Investigations and White Collar Criminal Defense: Corporate – Tier 4
- Corporate Investigations and White Collar Criminal Defense: Individuals – Tier 2 ...
The Legal 500 2018 recognizes five practice areas and 17 attorneys at Buckley Sandler
Buckley Sandler LLP again has been noted as one of the nation’s top law firms by The Legal 500 in its 2018 rankings, with recognition in five practice areas:
- Financial Services: Litigation
- Financial Services: Regulation
- Corporate ...
The Legal 500 2017 Recognizes Four Practice Areas and 20 Attorneys at Buckley Sandler
Buckley Sandler has again been cited as one of the nation’s top law firms by The Legal 500 in its 2017 rankings, with the recognition of four practice areas:
- Financial Services: Litigation
- Financial Services: Regulatory
- Cyber Law (Data Protection and ...
Former Deputy Chief Counsel for Office of the Comptroller Joins BuckleySandler
WASHINGTON, DC (January 3, 2017) – BuckleySandler LLP, a premier financial services, government enforcement and litigation law firm, announced today that former Deputy Chief Counsel for the Office of the Comptroller of the Currency (OCC), Daniel P. Stipano has joined the firm as a Partner in its...
Press ReleasesBuckleySandler Hosts Eighth Annual Fair Lending Today Conference
BuckleySandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by BuckleySandler attorneys...
Press ReleasesBuckley Sandler Hosts Annual Fair Lending Today Conference
Buckley Sandler LLP hosted its annual Fair Lending Today conference in Washington, DC, March 15-16, 2015. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The roundtables and seminars were led by Buckley Sandler...
Press Releases
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FYI
Special Alert: CFPB proposes small business loan data collection regime
Recent Blog Posts
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July 21, 2023
Fed’s Barr raises concerns about AI redlining
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July 7, 2023
Highlights from the CFPB’s 2022 fair lending report
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June 23, 2023
CFPB, FTC, and consumer advocates ask 7th Circuit to review redlining dismissal
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April 21, 2023
FHFA seeks to codify fair lending oversight
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April 7, 2023
FHFA updates GSE equitable housing finance plans