Assistant Attorney General Kristen Clarke said that fair lending is “one of most significant issues of our time” CFPB Fair Lending Director Patrice Ficklin stated the bureau would take “fresh approaches” when examining redlining, and David Enzel, HUD’s general deputy assistant secretary for fair lending, discussed a dedicated team at HUD in Washington that had been established to focus on redlining. The most commonly-articulated area of focus is redlining, as evidenced by the Department of Justice’s new “Combatting Redlining Initiative,” which will involve an “aggressive and coordinated enforcement effort to address redlining.” The DOJ states it “will seek to address fair lending concerns on a broader geographic scale than the Justice Department has ever done before.” This will be a coordinated effort among agencies, as evidenced by comments from officials from the DOJ, CFPB and the Department of Housing and Urban Development at a fair lending conference held in late 2021. Even before Chopra was confirmed, his predecessor, Dave Uejio, said “it is crucial that the bureau apply a racial equity lens and to find practical ways to make freedom from racial prejudice and pursuit of racial equity a priority in the full breadth of the bureau’s work.” Chopra is fully on-board with this view, and banks can expect robust and increasingly broad and comprehensive fair lending examinations and enforcement proceedings. This has been a consistent theme from the agencies for some time now. Perhaps no topic has been mentioned more often, or in stronger terms, than fair lending. Banks can expect further scrutiny in 2022 regarding trends observed during and (hopefully and finally) coming out of the pandemic. Concerns about pandemic recovery are also seen in the regulators’ focus on servicing of mortgage and student loans, and access to credit in general (evidenced by a series of reports the bureau issued in 2021). It also stated that small businesses, especially women- and minority-owned business, have faced more severe economic consequences due to the pandemic. Its Strategic Plan mentions equitable recovery from the pandemic as one of the bureau’s priorities, citing rising housing insecurity as a concern. The bureau has again been outspoken in this regard. The concepts of equity and fairness will pervade many issues impacting banks, and certainly those dealing with consumer protection, fair lending, and unfair or deceptive acts or practices (UDAP). But these concepts are not exclusive to the bureau the FTC, for example, states the FTC seeks to “dvance racial equity, and all forms of equity, and support underserved and marginalized communities through the FTC’s consumer protection mission.” Even though the FTC is not (directly) a bank regulator, it is indicative of a “whole-of-government approach” that has been mentioned by various agencies as a more unifying means to accomplish such wide-ranging objectives. Its recently-issued “Strategic Plan for Fiscal Years 2022-2026” mentions addressing outcomes for households and communities, “many of which reference the concept of equity,” and that the bureau will “embed a racial equity lens” in all its activities. ![]() These terms appear again and again when Director Chopra speaks and writes about the bureau’s goals. This means there will be new priorities and directions the agencies will take, some yet unknown, but a few themes have been clear and consistent: Each of the prudential regulators is also in some stage of a leadership change. Rohit Chopra has finally been confirmed as the permanent director of the CFPB, and he’s jumped in with both feet. This article originally appeared as the cover story in the March/April 2022 issue of ABA Bank Compliance magazine.Ĭhief among the reasons 2022 promises to be a dynamic year in compliance is the new administration (although it’s not so new anymore after a year-plus) and new leadership at the agencies.
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