Lenders' Anti-Discrimination Efforts Lagging, CFPB's Cordray Says

June 24, 2013
American Banker  
mortgage lending news

Lenders are failing to practice fair lending and prevent discrimination in areas outside of the housing sector, according to Consumer Financial Protection Bureau (CFPB) director Richard Cordray. While many lenders maintain "robust" programs for fair mortgage lending, their compliance programs in other areas of consumer lending -- if they have them at all -- are "weak," he wrote in a June 20 letter to Rep. Terri Sewell (D-Ala.). In March, the CFPB said it could sue banks that fund discriminatory vehicle loans made by auto dealers, as the practice violates the 1974 Equal Credit Opportunity Act. Cordray's letter indicated that the regulator also is examining possible discrimination beyond housing and auto finance. The agency said it is keeping an eye out for lending decisions that have a "disparate impact" on minority consumers.
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