FTC Summarizes its 2015 ECOA and Regulation B Activity for CFPB Annual Report

In response to the CFPB’s request for information in preparing its 2015 Annual Report to Congress, the FTC recently summarized its 2015 engagement in various research and policy development efforts, as well as its efforts to provide business and consumer education materials to the public to advance adherence to the law.  The FTC has ECOA and Regulation B enforcement authority, and the Dodd-Frank Act gave the FTC authority to enforce any CFPB rules applicable to entities within the FTC’s jurisdiction.  The CFPB and FTC coordinate certain law enforcement, rulemaking, and other activities.

In 2015, the FTC and the NAACP of Georgia hosted an “Obstacles to Economic Opportunity” conference, in which participants examined frauds affecting the African American community and discussed some key consumer issues affecting the community, including credit scams, short-term loan scams, income and employment scams, and auto buying.

Additionally, the FTC hosted a public workshop attended by various stakeholders (such as industry representatives, consumer advocates, and government regulators) to address the growing use of online lead generation in industries such as lending and education, as well as consumer protection issues raised by industry practices.  The workshop further explored issues that consumers and businesses should know about and address, including how online lead generation works, why types of this activity may be unlawful under the FTC Act’s UDAP prohibitions, business best practices, and how consumers can avoid unlawful conduct.

The FTC also is seeking public comment on a proposed consumer survey regarding consumer experiences in buying and financing automobiles at dealerships, with a goal of determining useful insights about current consumer protection issues that exist and may be addressed through FTC action.  Topics to be covered include consumer experience in shopping for and choosing an automobile, the process of agreeing to an auto price, the process for trading in an old auto, the consumer experience in obtaining financing, additional products or services offered by the dealer, contracts between the consumer and dealer post-purchase, and the consumer’s overall perception of the purchase experience.  The FTC intends to review consumer purchase and financing documents as part of the survey.

In addition to these research and policy development efforts, the FTC also has engaged in consumer and business education efforts, including updates to its Mortgage Discrimination publication which informs about ECOA and alerts consumers to practices that are illegal under federal law.  In connection with its conference jointly hosted with the NAACP of Georgia, the FTC issued a blog post providing information about the conference and including discussions about how African Americans are denied mortgages at a higher rate than other groups even when credit ratings and salaries are the same and that there has been a decrease in mortgage fraud but an increase in auto loan fraud (sometimes committed by the same convicted mortgage lenders).

The FTC’s letter can be found at: https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-enforcement-activities-under-equal-employment-opportunity-act-regulation-b/160210cfpb_ecoa_report.pdf.