On March 16, the Consumer Financial Protection Bureau
(CFPB) announced that it would begin examining
financial institutions for discriminatory practices under its
authority to prohibit unfair, deceptive, or abusive acts or
practices (UDAAP). Specifically, the CFPB issued changes to its
examination manual on UDAAPs that require examiners to scrutinize
discriminatory conduct that may be unfair − including in
situations where fair lending laws may not apply.
The CFPB has broad authority to examine bank and non-bank
financial institutions for compliance with federal consumer
financial law. As part of that mandate, the CFPB and other bank
regulators have traditionally relied on the Equal Credit
Opportunity Act (ECOA) to address discriminatory practices. ECOA,
however, is limited to extensions of credit. In contrast, the
CFPB's unfairness authority applies to all consumer financial
products or services, such as collections, payments, remittances,
and deposits.
