Washington, DC — Today, in a keynote address at the National Community Reinvestment Coalition’s (NCRC) annual conference, Consumer Financial Protection Board (CFPB) Director Richard Cordray announced that the agency will use all available legal avenues, including disparate impact, to pursue discriminatory lenders.
“We want consumers to avoid the marketplace’s silent pickpocket — discrimination,” said CFPB Director Richard Cordray. “We cannot afford to tolerate practices, intentional or not, that unlawfully price out or cut off segments of the population from the credit markets. That’s why the CFPB is educating consumers about their fair lending rights and pursuing lenders whose practices are discriminatory.”
NCRC President and CEO John Taylor made the following statement: “This is a significant decision. It will help to shine a spotlight on the discriminatory practices in the lending marketplace, which are widespread and need to be purged. There should be no tolerance for discrimination, whether in intent or in practice. CFPB’s action is a positive step towards building an economic system that offers opportunity and a fair chance to prosper for all Americans. We applaud CFPB Director Cordray for his leadership.”
“Cordray made two key announcements in efforts to guard against fair lending abuses. He established that the CFPB is concerned with eliminating practices that, intentionally or not, have the effect of discriminating against people. He affirmed the intention of the Consumer Financial Protection Bureau to enforce the long-standing disparate impact doctrine. We are pleased to have a regulator who takes seriously their duty to protect people of color, older Americans, veterans, students and all populations vulnerable against discrimination in every form of lending,” said Taylor.
CFPB has issued a compliance bulletin declaring the Bureau’s intention to recognize disparate impact in its enforcement of the Equal Credit Opportunity act. Disparate impact occurs when a lender’s practices or policies are facially neutral but have discriminatory effects.
Today marks the first day of NCRC’s annual conference. This year’s conference “Not Just an Economy, a Just Economy” focuses on equitable solutions to the foreclosure crisis, consumer financial protection, and new threats to fair access to capital and credit.
Featured speakers at this year’s conference include: Richard Cordray, Director of the Consumer Financial Protection Bureau, Shaun Donovan, Secretary of the Department of Housing and Urban Development, Franklin Raines, former Fannie Mae Chairman and CEO, Joseph Smith, former North Carolina Banking Commissioner, and Eugene Ludwig, Founder and CEO of Promontory Financial Group. Get the full conference schedule.