Dear Director Chopra,
On March 16, the Consumer Financial Protection Bureau (CFPB or Bureau) announced changes to its exam manual for evaluating potential unfair, deceptive and abusive acts and practices. Specifically, the Bureau stated that the changes to the manual were intended to guide “examiners in evaluating discriminatory practices as potential unfair practices,” further explaining that, in the Bureau’s view, discrimination may meet each of the three prongs of the statutory test for unfairness: discrimination may cause substantial harm to consumers, that they cannot reasonably avoid, and such harm may not be outweighed by countervailing benefits to consumers or competition. The Bureau also asserted that “a discriminatory act or practice is not shielded from the possibility of being unfair, deceptive or abusive even when fair lending laws do not apply to the conduct. For example, not allowing consumers of a certain religion or race to open deposit accounts, or subjecting consumers of a certain religion or race to different requirements to open deposit accounts, may be an unfair practice even in those instances when [the Equal Credit Opportunity Act] does not apply to this type of transaction.” In addition, the revised manual provides that a discriminatory act or practice that is unfair, deceptive, or abusive may also violate other antidiscrimination laws, such as ECOA.
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