The CFPB released its Fair Lending Report to Congress, which provides an update on the CFPB’s efforts with respect to its fair lending mandate. Section 1013 of the Dodd-Frank Act requires the CFPB’s Office of Fair Lending and Equal Opportunity “provid[e] oversight and enforcement of Federal laws intended to ensure the fair, equitable, and nondiscriminatory access to credit for both individuals and communities that are enforced by the [CFPB].” The report covers the period since its last report (see December 11, 2012 Alert) through December 31, 2013. The report notes several key developments with respect to the CFPB’s fair lending supervision and enforcement efforts. The CFPB’s risk-based fair lending prioritization process reportedly has increased efficiencies in supervision of fair lending activity. Additionally, the report includes information about the methods used during certain fair lending supervisory reviews. For example, the CFPB noted the importance of compliance management systems; and in particular, the quality of a supervised entity’s CMS—whether there is an up-to-date fair lending policy statement, regular training, and ongoing monitoring for compliance with fair lending policies and procedures. Of note, the report discusses several areas that the CFPB considers “supervision and enforcement priorities”: (1) mortgage lending; (2) auto finance (particularly discretionary dealer markup) and (3) other product areas, including unsecured consumer lending. Finally, the report notes that the CFPB intends to continue its fair lending-related outreach to industry, advocates, consumers, and other stakeholders.
Alert May 13, 2014