Featured Product

    CFPB Publishes 2021 Annual Fair Lending Report

    May 06, 2022

    The Consumer Financial Protection Bureau (CFPB) published the annual fair lending report for 2021, highlighting its future focus areas and the COVID-19 recovery.

    The report highlights that CFPB will focus on the future of financial services markets, which will be increasingly shaped by predictive analytics, algorithms, and machine learning. CFPB will also sharpen its focus on digital redlining and algorithmic bias amid the growing influence of technology platforms, including big tech firms, in the financial services marketplace. The report states that CFPB will identify emerging risks and develop appropriate policy responses and further analyze how unfair and discriminatory practices harm specific population segments. The Bureau will continue its cooperation with other regulators and law enforcement agencies with responsibilities to ensure fair lending and equal opportunity. In addition, CFPB will further assess small business lending to ascertain whether there are disparities in application, underwriting, and pricing processes and whether there are weaknesses in fair lending-related compliance management systems.

    In relation to the regulatory activity, CFPB issued a notice of proposed rulemaking on Section 1071 of the Dodd-Frank Act to collect small business lending data. The report also highlighted the CFPB participation in the interagency rulemaking processes with the Federal Reserve Board (FED), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Federal Housing Finance Agency (FHFA) to develop regulations to implement the amendments made by the Dodd-Frank Act to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) concerning automated valuation models. To address potential fair lending risk in models, CFPB is considering proposing a requirement that covered institutions establish policies, practices, procedures, and control systems to ensure that their automated valuation models comply with the applicable non-discrimination laws.

    In addition, CFPB published an advisory opinion to affirm that the Equal Credit Opportunity Act (ECOA)—a landmark federal civil rights law protecting individuals and businesses against discrimination in accessing and using credit—bars lenders from discriminating against customers after they have received a loan, not just during the application process. ECOA bans credit discrimination on the basis of race, color, religion, national origin, sex, marital status, and age. It also protects those who are receiving money from any public assistance program or exercising their rights under certain consumer protection laws. The advisory opinion states that the ECOA will continue to protect borrowers after they have applied for and received credit; and requires lenders to provide “adverse action notices” to borrowers with existing credit.

     

    Related Links

     

    Keywords: Americas, US, Banking, Lending, Credit Risk, Predictive Analytics, Machine Learning, Big Tech, Regtech, SME, Suptech, US Agencies, Dodd Frank Act, Automated Valuation Models, ECOA, Reporting, Algorithmic Bias, CFPB

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8596