FTC Sends CFPB Annual Letter Summarizing ECOA and Regulation B Activities

On February 21, 2019, the FTC sent the CFPB its annual letter summarizing the FTC’s activities related to ECOA and Regulation B compliance during 2018, for the CFPB’s use in preparing its 2018 Annual Report to Congress.

The letter is in response to the CFPB’s request for information about the FTC’s ECOA and Regulation B enforcement activities over entities within the FTC’s jurisdiction, which includes most providers of financial services that are not banks, thrifts, or federal credit unions.  However, it does not discuss such activities because the FTC indicated that it does not conduct compliance examinations or collect compliance-related data regarding the non-bank entities under its jurisdiction.  The letter instead provides information about the FTC’s ECOA-related research and policy development and consumer and business education initiatives.  The research and policy development initiatives described in the letter include:

• The seventh session of the “FTC Hearings on Competition and Consumer Protection in the 21st Century” on the use of algorithms, artificial intelligence, and predictive analytics in business decisions and conduct.  The letter reports that panelists discussed how issues of fairness, bias, and discrimination could impact the use of such technologies and whether legal protections (e.g., ECOA) were adequate to address these issues.
• A continuing qualitative study of consumers’ experiences in buying and financing automobiles at dealerships.  According to the letter, the study’s results will provide meaningful information about consumers’ experiences, and help focus FTC initiatives in this area, including consumer education regarding the purchase and financing process, and business education to promote compliance with laws enforced by the FTC (e.g., the FTC Act and ECOA).
• The continued work of the FTC’s Military Task Force on military consumer protection issues, and other initiatives through which the FTC provided military consumers with information about ECOA and Regulation B protections, including: (i) the FTC’s Staff Perspective on its military consumer financial workshop held in San Antonio in July 2017; (ii) the FTC’s participation in a Navy Legal Services Training Program in Norfolk, Virginia in July 2018; and (iii) FTC staff serving as a liaison to the American Bar Association’s Standing Committee on Legal Assistance for Military Personnel.
• The FTC’s continued membership in the Interagency Task Force on Fair Lending, which is a joint undertaking with the CFPB, DOJ, HUD, and the federal banking regulatory agencies.

Regarding consumer and business education initiatives, the letter states that the FTC engaged in efforts to provide education on important issues, such as those related to credit transactions subject to Regulation B.  As an example, the letter states that the FTC released a business blog post about the importance of the military consumer financial workshop, mentioned above, noting that recent recruits may be away from home for the first time and managing their first paycheck, emphasizing the value of ongoing financial education throughout a military career, and providing related FTC resources available to servicemembers and veterans.