- CFPB to Coordinate with Department of Justice and Prioritize Fair Lending Enforcement During 2013
- January 4, 2013 | Authors: Jacob "Jake" A. Lutz; Thomas "Tom" O. Powell; Seth A. Winter
- Law Firms: Troutman Sanders LLP - Washington Office ; Troutman Sanders LLP - Atlanta Office ; Troutman Sanders LLP - Richmond Office
On December 6, 2012, the Consumer Financial Protection Bureau (CFPB) announced that it and the Department of Justice (DOJ) agreed to formally coordinate efforts related to enforcing fair lending laws. The CFPB and DOJ released a memorandum of understanding (MOU) that outlines processes for sharing information, conducting joint investigations, and passing referrals and notifications between the two agencies. This coordination will promote the tandem use of CFPB’s authority to bring public enforcement actions against any person subject to CFPB supervisory or enforcement authority for Equal Credit Opportunity Act (ECOA) violations, with DOJ’s authority to bring federal lawsuits to enforce the ECOA. 
In addition, the CFPB recently released its 2012 Fair Lending Report to Congress. This report describes in detail the CFPB’s efforts to build and implement a comprehensive fair lending program, including establishing the Office of Fair Lending and Equal Opportunity of the CFPB. Of particular note is the report’s statement that the CFPB is developing a “risk-based approach” to fair lending supervision and enforcement to allocate efficiently CFPB fair lending resources for the greatest benefit to consumers.
Troutman Sanders’ Financial Institutions practice group anticipates that financial institutions of $10 billion and larger and other non-bank lenders will be the subject of most of the CFPB’s fair lending enforcement activity. It appears that the CFPB anticipates that robust enforcement activities against large institutions, in turn, will impact the lending practices, credit administration and other actions of smaller institutions.
These recent announcements make clear that the CFPB will emphasize fair lending enforcement activities in 2013 and beyond to promote “fair, equitable and nondiscriminatory access to credit,” with the DOJ playing an important role. Financial institutions could be subject to significant fair lending enforcement activity by the CFPB and DOJ during 2013, potentially similar to some of the enforcement actions filed by the CFPB in conjunction with other federal regulators in 2012 relating to credit card marketing “tack-on” practices.
 Both the CFPB and the DOJ have enforcement authority to protect against discriminatory lending under the ECOA, which makes it illegal for creditors to discriminate against credit applicants because of race, color, religion, national origin, sex, age, and other factors.