CFPB Outlines 2017 Fair Lending Priorities

On Friday, December 19, 2016, the CFPB released a short statement about its intended fair lending priorities for 2017.  The Bureau indicated it plans to focus on redlining, mortgage and student loan servicing, and small business lending.  Notably, the statement indicated the Bureau is not going to focus on auto lending and credit cards in the coming year because it has “achieved important progress” in these areas over the past couple years.

 

CBA General Counsel Steve Zeisel shared the following thoughts on the release:

 

"The point of this end-of-year release was to highlight the CFPB’s areas of fair lending focus for the coming year. Three areas were mentioned: (i) Redlining; (ii) Mortgage and Student Loan Servicing; and (iii) Small Business Lending. But the final paragraph of the release also refers to what they are not going to focus on next year: Auto lending and credit cards.

 

"The Department of Justice’s Civil Rights Division has also told us in the past that Indirect Auto Lending is no longer one of its fair lending priorities. They believe the consent orders sent a clear message regarding legal compliance, and they can now turn their attention elsewhere.  However, this is the first we have heard the CFPB say the same thing.

 

"The emphasis on redlining is also similar to what we have heard from DOJ.  They have been beefing up their redlining efforts even more, post-Hudson City and BankcorpSouth, and we might expect to see additional enforcement cases in the coming year.  This suggests the CFPB will continue to work closely with Justice on redlining matters. Guidelines on redlining compliance were also included as part of the 13th Edition of CFPB’s Supervisory Highlights, the CFPB issued in October.  Of course, the CFPB work with DOJ may be affected by any changes in priorities due to the incoming administration.

 

"Regarding an enhanced small business lending focus, the statement from the CFPB says, 'Congress expressed concern that women-owned and minority-owned businesses may experience discrimination when they apply for credit, and has required the CFPB to take steps to ensure their fair access to credit.' It is not clear if the CFPB is sending a signal there will be ECOA enforcement actions in small business lending in the coming year, or it is referring to the start of the information gathering for the eventual rulemaking under section 1071 of the Dodd-Frank Act. We have it on good authority they are not likely to begin the actual 1071 rulemaking for at least a year."