The New York Attorney General entered into two related Consent Order and Judgments on January 16, 2025, the first with a financial company offering short-term loans to small businesses and the second with several of the company’s officers. The Consent Orders combine for an aggregate settlement amount in excess of $1 billion,…
On November 19, 2024, the District of Columbia’s Attorney General (DC AG) announced that it had filed a complaint in the Superior Court of the District of Columbia against an online lender for alleged violations of the District of Columbia Consumer Protection Procedures Act (CPPA). According to the DC AG’s complaint, the company, which operates both a website and…
On October 15, 2024 the CFPB and DOJ announced they had jointly filed a complaint and consent order against a mortgage company over allegations of racial discrimination in Birmingham, Alabama. The joint complaint alleged that the company engaged in unlawful discrimination by “redlining majority-Black and high-Black areas in Birmingham” and engaging in acts that would discourage applicants…
On September 13, 2024, the United States District Court for the Southern District of Texas granted in part and denied in part the defendants’ motion to dismiss in CFPB v. Colony Ridge, Case No. 4:23-cv-04729. The Court held that the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of…
On July 11, the Seventh Circuit held that the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq. (ECOA) authorizes the imposition of liability for the discouragement of prospective applicants. See CFPB v. Townstone Financial, Inc., ___ F.4th ___ (7th Cir. 2024), 2024 WL 3370023. As anticipated in Goodwin’s…
On June 24, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it had approved a new rule about the use of algorithms and artificial intelligence (AI) for home appraisals and valuations. The new rule was promulgated by the CFPB, the Federal Reserve, the Federal Deposit Insurance Corporation, the National…
On April 17, 2024, the Consumer Finance Protection Bureau (CFPB) announced that it had entered into a consent order with BloomTech Inc., d/b/a Bloom Institute of Technology (BloomTech), and BloomTech’s CEO, Austen Allred, resolving allegations that the company’s practices with respect to income-share agreements (ISAs) violated various consumer protection statutes. BloomTech, formerly known…
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…
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”),…
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…
Last month, the Justice Department (DOJ) and the Consumer Financial Protection Bureau (CFPB) issued a joint statement that reminded financial institutions that all credit applicants are protected from discrimination on the basis of their national origin, race and other characteristics covered by the Equal Credit Opportunity Act (ECOA), regardless of…
On October 30, 2023, the Federal Trade Commission (FTC) announced that the United States District Court for the Southern District of New York (SDNY) granted a permanent injunction containing a lifetime ban for the owner of a small-business lending company for unfair business practices and aggressive debt collection methods. On September 27, 2023, Judge Jed. S. Rakoff of SDNY granted summary…
On May 1, 2023, the Consumer Financial Protection Bureau (CFPB) issued a report and a proposed rule to clarify and strengthen its regulation of so-called Property Assessed Clean Energy (PACE) financing. PACE. PACE financing is home improvement financing secured by a tax lien, rather than a mortgage. See 15 U.S.C. 1639C(b)(3)(C)(i)….
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. §…
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…
On June 21, 2022, the U.S. Department of Justice (DOJ) filed a complaint and settlement agreement in federal court alleging that a social media company is in violation of the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-3619, for employing tools that allow advertisers of housing-related services to exclude certain…
On June 2, 2022, the U.S. Department of Housing and Urban Development (HUD) announced it reached a settlement agreement with a non-bank residential mortgage lender to resolve allegations of race-based lending discrimination in violation of the Fair Housing Act (FHA), 42 U.S.C. 3601 et seq. The settlement arose from a complaint filed with a fair…
On May 16, 2022, the Arizona Attorney General’s Office (Arizona AG) announced that it reached a settlement agreement with the owner of several debt collection companies regarding alleged deceptive debt collection practices in violation of state law. The agreement resolves a lawsuit by the Arizona AG filed in September 2020, alleging that the companies collected or attempted to collect payments…
On April 15, 2022, the Federal Trade Commission (FTC) announced that it obtained a permanent injunction against an Illinois-based, offshore, for-profit medical school for deceptive marketing practices. In its complaint and stipulated order filed same-day in the U.S. District Court for the Northern District of Illinois, the FTC alleged that the school violated the Telemarketing Sales Rule (TSR) when…
On February 8, 2022, the Attorney General for the District of Columbia (DC AG) announced that a Delaware-based online lender has agreed to pay $3.3 million to refund over 2,500 consumers who allegedly received misleadingly high-cost loans and lines of credit. This agreement resolves a lawsuit filed by the DC AG in the Superior Court of the District of Columbia,…