The Department of Justice and the Consumer Financial Protection Bureau (CFPB) signed an agreement today to strengthen coordination on fair lending enforcement and avoid duplication of their respective federal law enforcement efforts.
“The Department of Justice welcomes the new tools and resources the CFPB can bring to the fight against lending discrimination,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Cooperation between our two agencies promotes strong and effective civil rights enforcement, and today’s agreement will further our ongoing collaborative efforts.”
“Discrimination undermines equal access to credit,” said Richard Cordray, Director of the CFPB. “Today’s agreement is a critical step to better protecting consumers from illegal and discriminatory lending practices. We look forward to continuing our partnership with the Justice Department under this new framework.”
The memorandum of understanding (MOU) can be found here.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB works with the department and other regulators to promote consistent, efficient and effective enforcement of federal fair lending laws. The Dodd-Frank Act also expressly authorizes the CFPB to conduct joint investigations with the department in matters relating to fair lending. Both the CFPB and the Justice Department have authority to protect against discriminatory lending under the Equal Credit Opportunity Act (ECOA).
The ECOA makes it illegal for creditors to discriminate against applicants in credit transactions because of race, color, religion, national origin, sex, marital status, age, income coming from a public assistance program or an applicant’s exercise of certain consumer protection rights. The department has the authority to bring federal lawsuits to enforce the ECOA against any creditor that engages in a pattern or practice in violation of the ECOA or based on referrals of ECOA violations from federal bank regulators including the CFPB.
Today, the CFPB published its first annual Fair Lending Report, which highlights the Bureau’s recent accomplishments in fair lending. The report discusses the bureau’s efforts to fulfill its mandate to ensure fair, equitable, and nondiscriminatory access to credit for American consumers. Additionally, the report fulfills the Bureau’s congressional reporting requirements under the Dodd-Frank Act, the ECOA and HMDA.
A copy of this report is available here.