The Consumer Financial Protection Bureau (“CFPB”) and the U.S. Department of Justice have entered into an agreement to strengthen coordination of the enforcement of fair lending laws, including the Equal Credit Opportunity Act (“ECOA”), and avoid duplication of their respective federal law enforcement efforts. The December 6 agreement outlines the general framework for sharing information and preserving confidentiality, joint investigations and coordination, and referrals and notifications between the agencies. CFPB and the Justice Department will be sharing information in matters that the CFPB refers to the Justice Department, in joint investigations under ECOA, and in order to coordinate fair lending enforcement. The agreement applies to all fair lending laws for which the CFPB has supervisory or enforcement authority, including ECOA, the Truth in Lending Act and the Home Mortgage Disclosure Act. The agreement provides for collaboration in investigations as well as coordination in joint investigations. The agencies will also meet regularly to discuss pending fair lending investigations and opportunities for coordination. The CFPB will refer matters to the Justice Department when the CFPB has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination.
Nutter Notes: The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) grants the CFPB supervisory, enforcement and rulemaking authority under a number of federal fair lending and other consumer financial laws. The CFPB’s supervision program assesses compliance by large depository institutions with federal consumer financial laws and regulations. CFPB-supervised entities include banks and thrifts with assets over $10 billion, and their affiliates and service providers. However, the Dodd-Frank Act grants the CFPB authority to identify possible discriminatory lending patterns and enforce federal fair lending laws against any creditor regardless of size. The Dodd-Frank Act required the formation of the Office of Fair Lending and Equal Opportunity within the CFPB, and charged the office with ensuring that the CFPB provides “oversight and enforcement of federal laws intended to ensure the fair, equitable, and nondiscriminatory access to credit for both individuals and communities that are enforced by the CFPB.” The Justice Department has authority to protect against discriminatory lending under ECOA, among other authorities. A referral to the Justice Department does not affect the CFPB’s authority to pursue its own supervisory or enforcement actions. The CFPB and the Justice Department said that their efforts to coordinate enforcement will avoid unnecessarily duplicative actions.