On April 23, the White House issued an Executive Order entitled Restoring Equality of Opportunity and Meritocracy, directing federal agencies to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.” The Executive Order marks a potential shift in how federal fair lending laws will be enforced across the financial services sector.Continue Reading White House Executive Order Eliminates Disparate-Impact Liability Enforcement
The CFPB has recently dismissed two more enforcement actions—one against a major credit reporting agency and another against a lease-to-own financing provider. Both lawsuits involved allegations of abusive, unfair, and deceptive acts and practices. Continue Reading CFPB Drops Two More Major Lawsuits
On March 10, 2025, the CFPB informed the U.S. District Court for the Northern District of Texas that it will proceed with litigation against a short-term installment lender and its subsidiary for alleged violations of the Military Lending Act (MLA). The lawsuit alleges that the lender violated the MLA and a 2013 administrative consent order by issuing loans to military service members with interest rates exceeding the MLA’s 36% cap, included mandatory arbitration provisions in loan contracts, and failed to provide required disclosures. The CFPB further asserts that these practices continued despite a prior CFPB enforcement order against the lender’s predecessor.Continue Reading CFPB Moves Forward with Military Lending Act Enforcement Against Installment Lender
On January 17, 2025, the CFPB filed a complaint against an Illinois-based non-depository mortgage lender for allegedly engaging in discriminatory practices. The CFPB alleges the lender engaged in improper redlining by deliberately excluding certain neighborhoods from its services based on the racial and ethnic composition of those areas, in violation of the Equal Credit Opportunity Act (ECOA). Continue Reading CFPB Takes Action Against Illinois Mortgage Lender for Redlining Violations
On January 7, 2025, the United States Department of Justice (the “DOJ”) announced that a non-depository mortgage lender has agreed to pay $1.75 million in connection with allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods.Continue Reading DOJ Announces Third Settlement with a Non-Depository Lender to Resolve Alleged Redlining Claims
On November 1, the CFPB filed a proposed stipulated final order that would resolve the Bureau’s pending lawsuit in the Northern District of Illinois against a nonbank mortgage lender and broker for allegedly engaging in redlining and other discriminatory lending practices. In its underlying complaint filed in 2020, the CFPB alleged that the defendant violated the Equal Credit Opportunity Act (“ECOA”) by making statements in podcasts, radio shows, and marketing materials that discouraged prospective African-American applicants in Chicago and the surrounding suburbs from applying for mortgage loans.Continue Reading CFPB Reaches Settlement in Redlining Suit Against Nonbank Mortgage Lender
On June 25, the CFPB issued its annual fair lending report covering its fair lending activity in 2023. The Bureau noted that in 2023 it undertook 28 fair lending examinations and announced four enforcement actions. It separately referred 18 matters to the Department of Justice. Continue Reading Key Takeaways from the CFPB’s 2023 Fair Lending Report
On May 3, a California resident filed a class action lawsuit in federal court accusing a Los Angeles-based credit union of discriminatory practices, and raised a civil rights claim under 42 U.S.C. § 1981, and violations of the California’s Unruh Civil Rights Act. In the complaint, the plaintiff alleges his automobile loan application was unfairly denied because of his immigration status as a Deferred Action for Childhood Arrivals (DACA) recipient.Continue Reading DACA Recipient Accuses California Credit Union of ECOA Violations
On February 5, the DOJ and North Carolina’s attorney general announced a $13.5 million settlement deal with a large regional bank over redlining allegations.Continue Reading DOJ and North Carolina Attorney General Reach $13.5M Settlement in Discriminatory Lending Case
On February 5, several trade groups, including the American Bankers Association, the Independent Community Bankers of America, and the U.S. Chamber of Commerce, filed suit against the Federal Reserve Board, the FDIC, and the OCC accusing the regulators of exceeding their authority under federal law when promulgating new rules under the Community Reinvestment Act (CRA). Continue Reading Bank Groups Sue to Overturn New Community Lending Rules
On November 2, the CFPB issued a new report on state Community Reinvestment Act laws. The report found that many states adopted Community Reinvestment Acts (CRAs) similar to the federal Community Reinvestment Act of 1977. The report showed that state CRAs differ from the federal CRA to account for unique reinvestment priorities of individual states. The report also showed that nonbank mortgage companies’ increasing market share has influenced how states have developed their CRAs.Continue Reading CFPB Publishes New Report on State Community Reinvestment Laws