April 27, 2012
A Regulatory & Legislative Advisory for Compliance Professionals
Inside . . .
CFPB TO USE ALL LEGAL AVENUES TO PURSUE
DISCRIMINATORY LENDERS
CFPB News
2 Fair Housing Groups
Allege Mortgage
Servicer Discrimination
2 Changes to Upfront
Credit Card Fees
3 Overdraft Comment
Deadline Extended
The Consumer Financial Protection Bureau will use all available legal avenues –
including disparate impact – to pursue lenders whose practices discriminate against
consumers, the agency said April 18 in a press release. We cannot afford to tolerate
practices, intentional or not, that unlawfully price out or cut off segments of the
population from the credit markets,” bureau Director Richard Cordray said. “That’s why
the CFPB is educating consumers about their fair lending rights and pursuing lenders
whose practices are discriminatory.” The bureau also released a compliance bulletin
that reaffirms its commitment to enforce the Equal Credit Opportunity Act by
recognizing the disparate impact doctrine.
3 RESPA-TILA Draft
Proposals
4 Guidance on MLO
Compensation
4 Broad QM Rule with
Safe Harbor Needed
“Disparate impact occurs when a lender’s practices or policies are facially neutral but
have discriminatory effects,” the CFPB said. “Sometimes these practices meet a
legitimate business need that cannot reasonably be achieved as well by means that
are less disparate in their impact. But sometimes they do not.” The agency added that
it will monitor all banks and nonbanks under its supervision for potential fair-lending
violations. Read the CFPB press release. Read the compliance bulletin.
4 Banker Provides
Impact of QM
Proposals
5 CFPB Proposal on
Privileged Information
6 CFPB Remittance-Transfer Rule
Inadequate
6 CFPB's Raj Date to
Address ABA
Compliance
Conference
Cordray: Disparate Impact’s Consequences Are Real
In related news, CFPB Director Richard Cordray told the National Community
Reinvestment Coalition conference on April 18, that the consequences of disparate-impact discrimination are real and they affect consumers just as significantly as other
forms of discrimination. “Conduct that may seem benign – what the lawyers call
‘facially neutral’ actions – can create effects that are just as devastating for those
marginalized communities,” Cordray said. “An example of this kind of conduct is giving
loan officers wide discretion to determine how much to charge borrowers. This can
result in an aggregate pattern of African-American or female borrowers paying more
than similarly situated white or male borrowers.” “[T]his subtle but powerful form of
discrimination creates damages that are no less direct than the kind of overt and
blatant discrimination that, we hope and assume, is increasingly a relic of a bygone
era,” he said. Read Cordray’s speech.
6 Other CFPB News
Beware the Rattling Saber — but Keep Your Eye on the Ball
By Richard Riese, ABA Compliance Center
Bank Secrecy Act
10 Guidance on
CTR/SAR E-Filing
A year ago with Elizabeth Warren at the helm, the Bureau of Consumer Financial
Protection mounted a charm offensive. Today, Richard Cordray is abandoning any
charm as he unleashes barrage after barrage of saber-rattling enforcement rhetoric –
indiscriminately casting lenders as “silent pick-pockets” of those they serve and
advising customers who get a good loan to be suspicious of their creditor. So it goes in
