Acting Director Mulvaney Has Suggested that CFPB May Refuse to Enforce Key Parts of the Equal Credit Opportunity Act.
New York, NY - Sept. 5, 2018 - New York Attorney General Barbara D. Underwood – part of a coalition of 14 Attorneys General - called on the Consumer Financial Protection Bureau (CFPB) and Acting Director Mick Mulvaney to continue protecting the rights of consumers against credit discrimination under the Equal Credit Opportunity Act (ECOA). The Attorneys General share authority with the CFPB to enforce regulations regarding the ECOA and lead antidiscrimination efforts in their own states. As such, they are calling on the CFPB to continue enforcing the ECOA, including its provision for disparate impact liability.
“The Equal Credit Opportunity Act was enacted because of our country’s sordid history of credit discrimination – and it’s unbelievable that the CFPB is considering refusing to use it to protect consumers,” said Attorney General Underwood. “As we’ve shown, my office won’t hesitate to uphold the law and protect those we serve, even if the CFPB won’t.”
The ECOA is the principal federal antidiscrimination law for all forms of credit except home mortgage lending. It prohibits creditors from discriminating against consumers on the basis of race, color, religion, national origin, sex, marital status, and age. The ECOA also protects people from discriminatory intent and unconscious prejudices that do not mention race, color, religion, national origin, sex, marital status, or age, but still have a discriminatory effect that prevents equality of opportunity; this is called disparate impact liability. The CFPB is charged with oversight and enforcement of federal laws relevant to nondiscriminatory lending and credit practices, which includes interpreting the ECOA.
The U.S. Supreme Court’s 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. dictated that the text of the ECOA provides for disparate impact liability, and numerous courts have continued to recognize disparate impact claims under the ECOA. In their letter, the Attorneys General say they “will not hesitate to uphold the law if CFPB acts in a manner contrary to law with respect to interpreting ECOA.”
The letter was signed by the Attorneys General of North Carolina, California, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and the District of Columbia.