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The U.S. Department of Housing and Urban Development announced that it will “shortly” seek public comment on whether its controversial disparate impact rule is consistent with the Supreme Court’s Inclusive Communities decision. In Inclusive Communities, the Supreme Court held that disparate impact is a cognizable theory of discrimination under the Fair Housing Act. Thus, a defendant may be liable for a practice that is facially neutral but that nevertheless has a discriminatory impact, unless there is a legally…
The CFPB announced on Wednesday, September 20th, 2017, proposed guidance to limit the Home Mortgage Disclosure Act (HMDA) data it shares publicly. The Bureau’s 2015 HMDA amendments (discussed in our alerts here and here) revamped HMDA’s coverage and processes, including requiring lenders to report vast swaths of new data about mortgage applicants and their loans. At the time, the Bureau said that it was still considering what portion of that data it would share…
The CFPB recently announced the issuance of its first no-action letter (“NAL”) to Upstart Network, Inc., an online lending platform that uses alternative data to model consumer credit decisioning and pricing. The letter signifies that the CFPB has no present intention to recommend an enforcement or supervisory action against Upstart for violation of the Equal Credit Opportunity Act. This NAL comes as the Bureau “continues to explore the use of alternative data to help make…
As we have previously reported, in October 2015, the CFPB issued a sweeping final rule (“2015 Final Rule”) to amend Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The bulk of the 2015 Final Rule will become effective on January 1, 2018. With the effective date drawing nearer, the CFPB has proposed an amendment to the 2015 Final Rule, which would, for calendar years 2018 and 2019, increase the threshold for collecting and…
Today the Supreme Court issued its highly anticipated decision in Spokeo, Inc. v. Robins. The decision takes on a hot topic in consumer class action law today—what must a plaintiff plead and prove to have standing to sue for a violation of a federal statute? The Court held that an allegation of a statutory violation, without some showing of concrete harm, is not enough. Instead, in this Fair Credit Reporting Act case, the issue is…
On March 2, 2016, the Consumer Financial Protection Bureau (“CFPB”) broke new ground (at least for the CFPB) when it released a consent order against Dwolla, Inc., an online payment platform, regarding data security. While in many respects the data security “message” sent by the CFPB is not a new one (e.g., companies must live up to their data security promises), the consent order is particularly noteworthy because it represents the CFPB’s first formal foray into the…
The FTC rang in the New Year with a report, Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues. The report wrestles with the implications of using big data analytics to target and make decisions about customers. Some of the FTC’s observations are common sense, but others require more careful analysis. For example, the FTC discusses how it considers whether a company is subject to the Fair Credit Reporting Act, how even…
As previously reported, on October 15, 2015, the CFPB released a final rule (the “Rule”) amending Regulation C, 12 C.F.R part 1003, which implements HMDA. Shortly thereafter, we published a high-level summary of the Rule, describing the major changes to Regulation C across four broad areas: Covered institutions, i.e., the types of institutions required to collect and report HMDA data; Covered transactions, i.e., the types of transactions and applications subject to collection and reporting requirements;…
The U.S. House of Representatives passed legislation on November 18, 2015, that would revoke the CFPB’s guidance on indirect auto lending and expand the qualified mortgage rule’s safe harbor. The Reforming CFPB Indirect Auto Financing Guidance Act, H.R. 1737, “[d]eclares without force or effect” the CFPB’s Bulletin 2013-02 (Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act). The Portfolio Lending and Mortgage Access Act, H.R. 1210, would extend legal protections on…
On October 15, 2015, the CFPB released a final rule amending Regulation C, 12 C.F.R. part 1003, which implements the Home Mortgage Disclosure Act (HMDA). Like the August 2014 proposed rule, the final rule includes changes to Regulation C in four broad areas: (1) the types of institutions required to collect and report HMDA data; (2) the types of transactions and applications subject to collection and reporting requirements; (3) the data that must be collected…