Search Results: ECOA

Interpretable Algorithms as a Potential Solution to CFPB’s Guidance on AI-driven Credit Denials

In September 2023, the Consumer Financial Protection Bureau (CFPB) issued guidance on the use of artificial intelligence in issuing credit denials, a prevalent practice among lenders.  The CFPB explained that when denying a credit application, lenders must provide a substantive reason behind the denial.  The guidance further explains that the…

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FTC Reaches Settlement With Cash Advance Company

On January 24, 2024, the Federal Trade Commission announced that it had reached a settlement with an online cash advance provider and its co-founders resolving claims that the company violated the FTC Act, the Restore Online Shopper’s Confidence Act (ROSCA), and the Equal Credit Opportunity Act (ECOA),  by engaging in allegedly deceptive marketing tactics and…

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USAO Reaches $1.9 Million Agreement with Bank to Resolve Lending Discrimination Claims

On January 17, 2024, the United States Attorney’s Office for the Western District of Tennessee (“USAO”) announced that it entered into a consent agreement with a full-service bank, resolving allegations of lending discrimination in violation of the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601–3619 and the Equal Credit Opportunity Act (“ECOA”),…

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CFPB and DOJ Sue Land Developer Over Allegations of Discriminatory Lending

​On December 20, 2023, the CFPB announced that, along with the DOJ, it had filed suit against a Texas-based developer and lender for operating an allegedly illegal land sales scheme that targeted Hispanic borrowers. ​The complaint, filed in the U.S. District Court for the Southern District of Texas, alleges that the lender sells…

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Pursuant to Consent Order with CFPB, National Bank to Pay $25.9 Million for Alleged Discrimination Against Armenian Americans

O​n November 8, 2023, the CFPB and a national bank entered into a consent order​ to resolve allegations that the bank engaged in intentional discrimination against Armenian Americans who had applied for credit cards with said bank. Specifically, the CFPB alleges that between 2016 and 2021, the bank singled out…

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CFPB Files Opening Brief in its Appeal of District Court Ruling that ECOA Applies Only to Applicants

On June 14, 2023, the Consumer Financial Protection Bureau (CFPB) filed its opening brief in its appeal of a U.S. district court’s decision in the CFPB’s enforcement action against Townstone Mortgage (Townstone).  The CFPB’s brief argues that the Seventh Circuit should reverse the district court’s holding that the Equal Credit…

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DOJ Reaches Settlement Over Bank's Alleged Redlining

On May 31, 2023, the United States Department of Justice (DOJ), announced that it had entered into a settlement with a Philadelphia based bank and trust company over allegations that the bank had engaged in unlawful redlining in the Philadelphia metropolitan area.  In the Complaint, filed contemporaneously with the consent order in U.S. District Court for the…

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Court Dismisses CFPB’s ECOA Action Alleging Discrimination Against Prospective Applicants Against Nonbank Lender

On February 3, 2023, the United States District Court for the Northern District of Illinois granted Defendants Townstone Financial, Inc., a mortgage broker/lender, and Barry Sturner’s, Townstone’s owner, motion to dismiss the Consumer Financial Protection Bureau’s (CFPB or Bureau) redlining complaint brought under the Equal Credit Opportunity Act (ECOA), ECOA’s…

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DOJ Reaches $1.3 Million Settlement with Mortgage Lender for Allegedly Discriminatory Pricing Practices

On September 29, 2022, the U.S. Department of Justice (DOJ) announced that it reached a settlement with a Memphis-based bank to resolve alleged violations of the Fair Housing Act (FHA), 42 U.S.C. §§ 3601–3619, and Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691–1691f, and its implementing Regulation B, 12 C.F.R. §…

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CFPB and DOJ Order Mortgage Company to Pay Over $22 Million for Advertising and Marketing Discrimination

On July 27, 2022, the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Justice (DOJ) filed a complaint and proposed consent order in a federal district court alleging that a mortgage company intentionally discriminated against families living in majority-minority neighborhoods around Philadelphia in violation of the Fair Housing Act…

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CFPB and DOJ Reach $24.4 Million Settlement with Mortgage Originator for Alleged Lending Discrimination

On July 27, 2022, the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Justice (DOJ) announced that they reached a settlement with a nonbank residential mortgage lender to resolve allegations of race-based lending discrimination in violation of the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-3619; the Equal Credit Opportunity Act…

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FTC Announces $10 Million Settlement With Auto Dealers for Alleged Junk Fees and Discriminatory Practices

On April 1, 2022, the Federal Trade Commission (FTC) announced that it reached a settlement​ with a group of Illinois-based auto dealers to resolve allegations that they had violated Sections 13(b) and 19 of the Federal Trade Commission Act (FTCA), 15 U.S.C. § 53(b), 57b, the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601-1666j,…

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Emory Law Journal Reports New Studies That Authors Claim Show Racial Inequities in Lender Advertisements

A new essay published in the Emory Law Journal argues that two empirical studies of advertising by certain banks and payday lenders in Houston, Texas indicate that payday lenders steer African Americans and Latinos to their products, while banks market primarily to white consumers.  The authors suggest that, consistent with…

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CFPB, DOJ, and OCC Reach Settlement with Bank for Alleged Lending Discrimination

On October 22, 2021, the Consumer Finance Protection Bureau (CFPB) announced ​that the CFPB, Department of Justice (DOJ) and Office of the Comptroller of the Currency (OCC) collectively reached a joint settlement with a national bank that resolved allegations of mortgage lending discrimination in the Memphis metropolitan area in violation of the Fair Housing Act (FHA),…

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CFPB Sues Connecticut-Based Mortgage Lender

​On January 15, 2021, the Consumer Financial Protection Bureau (CFPB) announced it had filed suit in the United States District Court for the District of Connecticut against a Connecticut-based mortgage company and three individual defendants for alleged violations of the Truth in Lending Act (TILA)​, the Fair Credit Reporting Act (FCRA), the Equal Credit Opportunity Act…

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