The Dodd-Frank Act created the Office of Fair Lending & Equal Opportunity, part of the Consumer Financial Protection Bureau, or CFPB, to address credit discrimination. Congress also gave the CFPB authority over two key federal fair lending statutes. The CFPB has authority over the Equal Credit Opportunity Act, which prohibits discrimination against applicants in any type of credit transaction. This includes mortgages, car loans, student loans, and credit cards. The CFPB also has authority over the Home Mortgage Disclosure Act, which requires lenders to report mortgage data to allow for better fair lending enforcement.
The Office will play a lead role in the Bureau’s efforts to ensure fair, equitable, and nondiscriminatory access to credit for both individuals and communities. According to the CFPB, the Office has the following tools to enforce relevant statutes:
- Review lenders’ policies, procedures, and lending activity to detect and address potential discriminatory practices.
- Bring enforcement actions to stop discriminatory practices and remedy harm to consumers.
- Develop new policies, including rules about loan data collection required by Congress. These data will help ensure that lenders make credit available in a fair and non-discriminatory manner.
- Partner with private industry and fair lending, civil rights, consumer, and community advocates to promote fair lending compliance and education.
- Help ensure that consumers have the tools they need to make sound financial decisions and protect themselves from discriminatory practices.
- Assist in reviewing consumer complaints of unlawful discrimination. We can also review complaint patterns for early warnings about troubling lending practices. This data will help us in our supervision, enforcement, rule writing, and education efforts.
- Conduct research and analysis on equitable access to credit. This will include analyzing data collected under Federal regulations.
- Work with the Department of Justice, Department of Housing and Urban Development, Federal Trade Commission, and other federal and state agencies to make sure that our fair lending enforcement efforts are consistent, efficient, and effective.
Check dodd-frank.com frequently for updates on the Dodd-Frank Act and other important securities law matters.