We recently blogged about the request made by four leading trade groups for the CFPB to rescind the recent updates to the UDAAP section of its Supervision and Examination Manual that instruct examiners to consider discrimination in connection with non-credit products and services as an unfair act or practice.
The trade groups made their request in a letter to Director Chopra, which was accompanied by a white paper setting forth the legal basis for their position. A Law360 article reported that, in response to the letter, a CFPB spokesperson made certain comments that included a reference to “scare tactics orchestrated by lobbyists for Big Tech and Wall Street.”
We have been advised by Sam Gilford, CFPB Senior Advisor for Communications, that the CFPB spokesperson’s statement reported by Law360 was sent in error and was intended to respond to a recently launched U.S. Chamber of Commerce campaign directed at CFPB Director Chopra. Mr. Gilford shared the new statement he has provided to Law360 regarding the trade groups’ letter. Mr. Gilford stated that the CFPB “regularly engages with entities seeking to ensure they are avoiding unlawful discriminatory practices.” He also stated:
As the updated exam manual notes, discrimination may meet the statutory criteria for ‘unfairness’ by causing substantial harm to consumers that they cannot reasonably avoid, where that harm is not outweighed by countervailing benefits to consumers or competition. For example, there have been many reports of ‘banking while Black.’ Denying a consumer depository services on account of their race may not only be discriminatory but also an unfair practice.