Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 6 posts in ECOA.

Agencies Address Fair Lending Concerns of Industry and Indicate that ECOA, Ability-to-Repay Rule Compatible

In an October 22, 2013 statement released by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the National Credit Union Administration (collectively, “the Agencies”), the Agencies addressed the impact of the new Ability-to-Repay Rule, which takes effect in January 2014, on the Equal Credit Opportunity Act (ECOA). Specifically, the Agencies provided guidance regarding whether creditors would be liable under the disparate impact doctrine of ECOA (one of the methods of proving lender discrimination) if the creditors chose to only originate Qualified Mortgages (QMs) under the Ability-to-Repay Rule. As you might suspect, the Agencies indicated that the requirements of the Ability-to-Repay Rule and ECOA are compatible. Read More ›

CFPB Report Warns of Compliance and Mortgage Servicing Problems

The CFPB released its summer 2013 “Supervisory Highlights” Report highlighting numerous mortgage servicing and compliance issues affecting both banks and non-banks. The 25-page Report, which is based on the CFPB’s supervisory activity from November 2012 to June 2013, not only reviews the Bureau’s enforcement and supervisory actions, but it also provides some important insight for financial institutions into the CFPB’s examination processes. The Report’s key findings identify three important areas of concern for the CFPB: compliance management systems, mortgage servicing and fair lending.   Read More ›

Disparate Impact On The Chopping Block? Supreme Court to Hear Mt. Holly Disparate Impact Fair Housing Act Case

On June 17, 2013, the Supreme Court agreed to hear Township of Mount Holly v. Mount Holly Gardens Citizens in Action, a case that could drastically change the legal landscape regarding “disparate impact” liability under the Fair Housing Act (FHA) and, by analogy, the federal Equal Credit Opportunity Act (ECOA). The threshold issue on appeal is whether plaintiffs may use disparate impact to allege a violation under the FHA rather than proving liability by demonstrating an actual intent to discriminate, also known as “disparate treatment.” The “disparate impact” theory allows liability to be imposed even where there was no intent to discriminate, but where practices had a discriminatory effect. In the underlying appeal, the Third Circuit agreed with plaintiffs that disparate impact claims are cognizable under the FHA, but now the Supreme Court will review that ruling in what will likely be one of the more anticipated decisions of the Court’s 2013-2014 term.  Read More ›

Get Out the Popcorn (and an Energy Drink): The CFPB Releases Videos On New Mortgage Rules

The CFPB has just released a series of video presentations on the new mortgage rules issued by CFPB earlier this year. In his opening remarks, Director Cordray explains that these videos are part of “a broader effort on [the CFPB’s] part  to help you comply with the Dodd-Frank Act’s mortgage reforms and [the CFPB] rules.” These videos, cover:

The CFPB issued these videos “to provide an overview of the rules in a plain language format that makes the content more accessible and consumable for a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff.” Those of you hoping for action sequences involving Director Cordray will be disappointed. The videos are a series PowerPoint presentations by members of the CFPB staff. Each of the videos warns that these are just “staff guidance and not any official interpretation of the Bureau or legal advice.” This guidance is important because the videos are just overviews of the requirements and do not cover all aspects of the rules or the obligations that financial institutions face under these rules. Read More ›

CFPB Publishes Small Entity Compliance Guides for New HOEPA, ECOA, and TILA Rules- Institutions of All Sizes Should Take Notice

As readers of this blog know, in January 2013, the CFPB adopted rules governing the Home Ownership and Equity Protection Act (HOEPA), valuations under the Equal Credit Opportunity Act (ECOA), and appraisals of Higher-Priced Mortgage Loans (HPML) under the Truth In Lending Act (TILA). While these rules do not take effect until January 2014, the CFPB is wasting no time warning financial institutions of their obligations under these rules.  On May 2, 2013, the CFPB published three compliance guides for each of these rules targeted at small entities with limited legal and compliance staff. The guides can be found here: Guide for the 2013 HOEPA Rule; Guide for the ECOA Valuations Rule; and Guide for the TILA HPML Appraisal Rule. While billed as “Small Entity Compliance Guides,” mortgage lenders and servicers of all sizes could benefit from reviewing these materials to understand better the CFPB’s recent rules. Read More ›

ECOA Redux: CFPB Targeting Indirect Auto Lenders For Alleged Discriminatory Practices By Dealers

Today (March 21, 2013), the CFPB released a bulletin warning indirect auto lenders that the Bureau intends to “pursue” -- under the federal Equal Credit Opportunity Act (ECOA) -- those that fail to impose proper “controls” on dealer markups and allow dealer pricing discretion that the CFPB deems discriminatory to protected classes. Read More ›