CFPB’s 2021 Fair Lending Annual Report to Congress

On May 6, 2022, the CFPB released its 2021 Fair Lending Report to Congress, highlighting the CFPB’s recent major fair lending activities in several key areas, including enforcement, rulemaking, and stakeholder engagement.

The CFPB announced four fair lending-related enforcement actions in 2021.  These actions were brought against a bank, two non-bank mortgage lenders, and a company offering services directed at immigrants seeking to obtain bonds in order to be released from federal detention centers, and included claims brought under ECOA, various state consumer protection statutes, the EFTA, and the CFPA.  The report also highlighted interagency enforcement activities, noting the CFPB made two referrals in 2021 to the DOJ pursuant to ECOA that “involved discrimination in mortgage origination policies and mortgage origination pricing based on race and national origin.” In total, the FRB, FDIC, NCUA, OCC, and CFPB collectively cited 198 institutions in 2021 with violations of ECOA and/or Regulation B.

The Report highlighted rulemaking activities which the CFPB characterized as particularly critical for communities and individuals of color, women, and those who struggled to pay their mortgages or access small business loans as a result of the impacts of the COVID-19 pandemic.  Highlights from 2021 include:

• A proposed rule amending Regulation B to require covered financial institutions to collect and report to the CFPB data on applications for credit for small businesses, including those that are owned by women or minorities.

• An interpretive rule stating that the prohibition against sex discrimination under ECOA and Regulation B includes sexual orientation discrimination and gender identity discrimination.

• A final rule amending Regulation X with certain safeguards to consumers facing economic hardship or foreclosure due to the COVID-19 pandemic.

Finally, the Report identified 236 instances of CFPB staff participating in “stakeholder engagement activities” related to fair lending, such as new blog posts, press releases, videos, speeches, presentations, podcasts, roundtables, and webinars. Topics of these engagements included: racial bias; racial and economic equity issues; COVID-19 impacts on consumers; traditional and digital redlining (including algorithmic bias issues); agricultural and rural lending; and student lending, among other topics.  The CFPB also noted that it filed an amicus brief in the Seventh Circuit arguing that the term “applicant” in ECOA includes both those who are currently seeking credit and those who sought and have now received credit.