CFPB Issues Release Regarding its Intent to Target “Unfair Discrimination in Consumer Finance”


The Consumer Financial Protection Bureau (“CFPB”) issued a release on March 16, 2022 in order to announce changes to its supervisory operations with respect to discriminatory lending and servicing practices. 

In its press release, the CFPB explains that it has changed its approach towards examination of banks and non-banks in order to more closely “scrutinize” discriminatory practices. The CFPB’s announced changes are significant—as under the CFPB’s newly updated exam manual for evaluating unfair, deceptive, and abusive acts and practices (UDAAPs), both unintentional discriminatory practices and practices that fall outside of the scope of the Equal Credit Opportunity Act (ECOA) now may be held to meet the criteria for “unfairness.” Although not altogether unexpected, this announcement represents a substantial expansion of the regulator’s authority to police practices it deems discriminatory.

To that end, the CFPB explained that intentional or unintentional discrimination may meet the criteria for “unfairness” where it causes “substantial harm to consumers that they cannot reasonably avoid, where that harm is not outweighed by countervailing benefits to consumers or competition.” One example of this dynamic, per the CFPB, is that “denying access to a checking account because the individual is of a particular race could be an unfair practice even in those instances where ECOA may not apply.”

In the CFPB’s new exam manual, it is noteworthy how the definition of unfair acts or practices has changed. One element of an unfair act or practice defined in the CFPB’s exam procedures, whether a consumer is “reasonably able to avoid the injury” at issue, now includes the explicit statements that “[c]onsumers cannot reasonably avoid discrimination” and “consumers typically cannot avoid the harms of discrimination.” It is expected that these additions will increase the likelihood the CFPB will detect “unfairness” if it believes discriminatory conduct towards consumers has occurred. 

The CFPB’s release also outlined the scope of these new supervisory practices and the expected steps examiners will take to uphold this new mandate. The CFPB states it will examine for discrimination in “all consumer finance markets, including credit, servicing, collections, consumer reporting, payments, remittances, and deposits.” It is expected that examiners will require covered companies “to show their processes for assessing risks and discriminatory outcomes, including documentation of customer demographics and the impact of products and fees on different demographic groups.” The CFPB stated it also will look at how companies test and monitor their decision-making processes for unfair discrimination, as well as discrimination under ECOA.

To that end, the CFPB has now instructed examiners to determine whether:

Examiners will also now test to determine whether:

Takeaways

The CFPB has yet again continued to stress its commitment to strengthening enforcement of fair lending issues. These new changes to the CFPB’s examination procedures increase the potential that an examination might find “unfairness” if discriminatory conduct is found to exist. CFPB examiners will now place a renewed focus on discriminatory conduct, and covered entities should review their policies and procedures in advance of future examinations.


© 2025 Bradley Arant Boult Cummings LLP
National Law Review, Volume XII, Number 76