The start of a new year is traditionally the time to make new resolutions and establish new goals and priorities. The Consumer Financial Protection Bureau (CFPB) has used the calendar change to adopt an “out with the old and in with the new” theme. On December 16, 2016, the CFPB announced its fair lending enforcement priorities for 2017 – via a blog posting. After touting their prior fair lending enforcement actions, which have “resulted in over $400 million in payments and credits to over 500,000 consumers who experienced discrimination, and greater efforts by lenders to monitor their own lending practices for possible discrimination”, the CFPB advised that it “continue[s] to identify new and emerging fair lending risks … which also present substantial risk of credit discrimination for consumers”.

As such, the CFPB’s fair lending team intends to reprioritize their work in 2017 to increase their focus in the following risk areas:

  • Redlining - The CFPB intends to continue evaluating whether lenders have intentionally avoided lending in minority neighborhoods.
  • Mortgage and Student Loan Servicing - The CFPB intends to evaluate whether some borrowers who are behind on their mortgage or student loan payments may have more difficulty in working out a new solution with the servicer because of their race or ethnicity.
  • Small Business Lending - The CFPB intends to review whether women-owned and minority-owned businesses may experience discrimination when they apply for credit.

This reprioritization of the CFPB’s fair lending enforcement priorities is good news for motor vehicle finance companies and credit card lenders who have been in the CFPB’s cross-hairs. In 2017, the CFPB intends to shift its focus from these markets to target the markets or products listed above. Banks are now on notice that these core business areas are in the CFPB’s fair lending cross-hairs.

Banks should review and reprioritize their fair lending compliance programs to ensure that they are lending in their entire market areas, including in minority neighborhoods, working with all delinquent residential mortgage loan customers regardless of race or ethnicity, and fairly treating all small business credit applicants.

These changes in the CFPB’s fair lending focus areas means banks need to adopt and stick to a resolution to lose the weight of fair lending troubles in 2017. This is not a resolution that should go in one year and out the other. Resolve to focus on the three key areas above until the CFPB’s fair lending team reprioritizes otherwise.

You can read the full announcement from CFPB here.