[Federal Register Volume 87, Number 92 (Thursday, May 12, 2022)]
[Notices]
[Pages 29117-29131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10133]


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BUREAU OF CONSUMER FINANCIAL PROTECTION


Fair Lending Report of the Consumer Financial Protection Bureau, 
May 2022

AGENCY: Bureau of Consumer Financial Protection.

[[Page 29118]]


ACTION: Fair Lending Report of the Consumer Financial Protection 
Bureau.

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SUMMARY: The Consumer Financial Protection Bureau (Bureau or CFPB) is 
issuing its tenth Fair Lending Report of the Consumer Financial 
Protection Bureau (Fair Lending Report) to Congress. The Bureau is 
committed to ensuring fair, equitable, and nondiscriminatory access to 
credit for both individuals and communities. This report describes our 
fair lending activities in supervision and enforcement; guidance and 
rulemaking; interagency coordination; and outreach and education for 
calendar year 2021.

DATES: The Bureau released the 2021 Fair Lending Report on its website 
on May 6, 2022.

FOR FURTHER INFORMATION CONTACT: Susan Grutza, Policy Counsel, Fair 
Lending, at 1-855-411-2372. If you require this document in an 
alternative electronic format, please contact 
<a href="/cdn-cgi/l/email-protection#c2818492809d83a1a1a7b1b1aba0abaeabb6bb82a1a4b2a0eca5adb4"><span class="__cf_email__" data-cfemail="13505543514c5270707660607a717a7f7a676a53707563713d747c65">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

1. Fair Lending Report of the Bureau of Consumer Financial Protection, 
May 2022

Message From the Fair Lending Director

    Starting and owning a small business is the foundation of dreams 
and aspirations. There is a certain dignity in knowing the security and 
love of a stable, safe home in community anchored by individuals and 
businesses invested in the community's success. Both starting a 
successful small business and owning one's home are key building blocks 
of individual and generational wealth. Yet, individuals and communities 
of color generally face barriers to financing their small businesses 
and homes that their white counterparts do not experience. These 
families and communities also own their homes at much lower rates than 
non-Hispanic whites, and people of color who do own their homes are 
more likely to be at risk of foreclosure. This is due, in part, to a 
legacy of structural discrimination which extends to mortgage, auto, 
student, and other credit markets. The mission of fair lending is to 
break these discriminatory patterns and practices and to promote access 
to credit to create fairer markets for all.
    This report covers the Consumer Financial Protection Bureau's 
(CFPB's) fair lending activities during 2021. Much of the CFPB's 2021 
work centered on Acting Director Uejio's call for the CFPB to take bold 
and swift action to address issues of pervasive racial injustice and 
long-term economic impacts of the COVID-19 pandemic on individuals and 
communities. In addition, Director Chopra has prioritized the CFPB's 
foundations of financial inclusion, racial and economic equity, and 
fair competition. As a result, we focused our fair lending work on 
issues especially pertinent to people and communities of color and 
those at risk of losing their housing or unable to access credit for 
their small businesses. This work took various forms, utilizing all of 
the CFPB's available tools, and touched nearly every market within our 
purview.
    Notably, this year we brought an enforcement action against 
Trustmark National Bank (Trustmark) for redlining in the Memphis 
Metropolitan Statistical Area (MSA). Trustmark discouraged prospective 
applicants in Black and Hispanic neighborhoods, avoided locating 
branches or assigning loan officers to these communities, and failed to 
monitor its fair lending compliance. We continue to examine and 
investigate entities who are engaged in redlining, as well as mortgage 
pricing discrimination. Additionally, public reports of racist 
practices in the home appraisal industry led us to prioritize resources 
to ensure that the appraisals used to make lending decisions are 
accurate and free from bias. Redlining, pricing discrimination, and 
appraisal bias are significant barriers to fair competition in the 
mortgage market, impeding the ability of an individual borrower to get 
credit on fair terms, thus stifling growth in communities across the 
country.
    Home is not only the walls and beams of a house, but also the 
community that supports it. From the small businesses that anchor our 
neighborhoods, to the family farms that dot the countryside, these 
businesses are the drivers of opportunity in a community. In 2021, the 
CFPB took the significant step of issuing a notice of proposed 
rulemaking (NPRM) for section 1071 of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (Dodd-Frank Act), to collect certain data 
on applications for credit for women-owned, minority-owned, and small 
businesses. The need for this data was highlighted in 2020 and in 2021, 
as small businesses were hit especially hard by the COVID-19 pandemic, 
and as Black and Hispanic entrepreneurs faced headwinds in accessing 
small business credit compared to their white counterparts. The data 
collection intended with this proposed rule will allow the CFPB, 
advocates, industry, and other stakeholders to better monitor small 
business markets and community development needs to foster an inclusive 
and competitive small business lending market.
    Some bad actors target and exploit at-risk communities. In 2021, 
the CFPB sued Libre by Nexus (Libre) and JPay for engaging in unfair, 
deceptive, or abusive acts and practices. Libre targeted immigrants 
held in detention centers for a services scam that traps victims into 
paying expensive, long-term fees. JPay provided financial services to 
prisons and jails nationwide, charging unfair fees to their customers. 
In the United States, incarcerated individuals and individuals 
reentering society are overwhelmingly men of color. The CFPB will 
continue to fight discrimination that manifests as unfair, deceptive, 
or abusive acts and practices.
    I am encouraged by the possibility of utilizing vehicles like 
special purpose credit programs to expand access to credit, but 
skeptical of claims that advanced algorithms are the cure-all for bias 
in credit underwriting and pricing. Home is a place, home is a feeling, 
home shapes the people our children become. I am proud of what the CFPB 
achieved in 2021, our tenth year of existence, and I look forward to 
the future of fair lending and the next ten years, as we continue our 
work so that entrepreneurs have the pride of owning a successful small 
business and all individuals have the opportunity to know the comfort 
of a place worth calling home.

Sincerely,
Patrice Alexander Ficklin

1. Fair Lending Supervision and Enforcement

1.1 Risk-Based Prioritization

    Because Congress charged the CFPB with the responsibility of 
overseeing many lenders and products, the CFPB has long-used a risk-
based approach to prioritizing supervisory examinations and enforcement 
activity. This approach helps ensure that the CFPB focuses on areas 
that present substantial risk of credit discrimination for 
consumers.\1\
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    \1\ For additional information regarding the CFPB's risk-based 
approach in prioritizing supervisory examinations, see Section 
2.2.3, Risk-Based Approach to Examinations, Supervisory Highlights 
Summer 2013, available at https://files.consumerfinance.gov/f/201308_cfpb_supervisory-highlights_august.pdf.
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    As part of the prioritization process, the CFPB identifies emerging 
developments and trends by monitoring key consumer financial markets. 
If this field and market intelligence identifies fair lending risks in 
a particular market, that information is used to determine the type and 
extent of attention required to address those risks.
    The prioritization process incorporates a number of additional

[[Page 29119]]

factors, including tips and leads from industry whistleblowers, 
advocacy groups, and government agencies; supervisory and enforcement 
history; consumer complaints; and results from analysis of Home 
Mortgage Disclosure Act (HMDA) and other data.
    As a result of its annual risk-based prioritization process for 
2021, in 2021, the CFPB focused much of its fair lending enforcement 
and supervision efforts on advancing the CFPB's priorities surrounding 
racial and economic equity and promoting economic recovery related to 
the COVID-19 pandemic.
    Additionally, the CFPB focused its fair lending supervision efforts 
on mortgage origination and pricing, small business lending, student 
loan origination work, policies and procedures regarding geographic and 
other exclusions in underwriting, and on the use of artificial 
intelligence (AI) and machine learning models.
    As in previous years, the CFPB's 2021 mortgage origination work 
continued to focus on redlining (and whether lenders intentionally 
discouraged prospective applicants living in, or seeking credit in 
minority neighborhoods from applying for credit); assessing whether 
there is discrimination in underwriting and pricing processes such as 
steering; and HMDA data integrity and validation reviews (both as 
standalone exams and in preparation for Equal Credit Opportunity Act 
(ECOA) exams that will follow).
    The CFPB's small business lending work looked to assess whether 
there are disparities in application, underwriting, and pricing 
processes, redlining, and whether there are weaknesses in fair lending-
related compliance management systems (CMS).
    Across multiple markets, the CFPB evaluated whether lenders 
maintain policies and procedures that exclude certain types of income 
or exclude property on the basis of geography in underwriting 
decisions.
    The CFPB's student loan origination work included a focus on 
lenders' policies and practices in underwriting or pricing for fair 
lending compliance. The CFPB also is expanding its evaluation of AI and 
machine learning models as used by institutions, including in 
evaluating applicants for credit.

1.2 Fair Lending Enforcement

    Congress authorized the CFPB to bring actions to enforce the 
requirements of eighteen enumerated statutes, including ECOA, HMDA, and 
Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). The CFPB 
engages in research, conducts investigations, files administrative 
complaints, holds hearings, and adjudicates claims through the CFPB's 
administrative enforcement process. The CFPB also uses its independent 
litigation authority to file cases in Federal court alleging violations 
of fair lending laws under the CFPB's jurisdiction. Like other Federal 
regulators, the CFPB is required to refer matters to the Department of 
Justice (DOJ) when it has reason to believe that a creditor has engaged 
in a pattern or practice of lending discrimination.\2\
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    \2\ See 15 U.S.C. 1691e(h).
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1.2.1 Public Enforcement Actions
    In 2021, the CFPB announced four fair lending-related enforcement 
actions. These actions were brought under ECOA as well as other Federal 
consumer financial laws that protect consumers and ensure fair access 
to credit, including the Consumer Financial Protection Act of 2010 
(CFPA) and the Electronic Fund Transfer Act (EFTA). These actions 
included Trustmark National Bank (Trustmark); LendUp Loans, LLC 
(LendUp); JPay, LLC (JPay); and Nexus Services, Inc. (Libre by Nexus).
Trustmark
    On October 22, 2021, the CFPB, together with DOJ, filed a complaint 
and proposed consent order in the Federal district court for the 
Western District of Tennessee in settlement of claims against 
Trustmark, which is headquartered in Jackson, Mississippi.\3\ The joint 
complaint alleged that Trustmark engaged in unlawful discrimination 
against applicants and prospective applicants, including by redlining 
majority Black and Hispanic communities in the Memphis MSA and engaged 
in acts and practices that would discourage prospective applicants from 
applying for credit in violation of ECOA, Regulation B, and the CFPA. 
In the joint complaint, DOJ also alleged that Trustmark's conduct 
violated the Fair Housing Act (FHA).
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    \3\ Consumer Fin. Prot. Bureau, Trustmark National Bank, 
(https://www.consumerfinance.gov/enforcement/actions/trustmark-national-bank/).
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    The consent order, as entered by the court on October 27, 2021, 
requires Trustmark to invest $3.85 million in a loan subsidy program 
that will offer qualified applicants for credit secured by properties 
in majority Black and Hispanic neighborhoods in Memphis loans on a more 
affordable basis than otherwise available from Trustmark; open a new 
loan production office in a majority Black and Hispanic neighborhood in 
the Memphis MSA; fund targeted advertising to generate applications for 
credit from qualified consumers in majority Black and Hispanic 
neighborhoods in Memphis; and take other remedial steps to improve its 
fair lending compliance and serve the credit needs of majority Black 
and Hispanic neighborhoods in the Memphis MSA. The order also requires 
Trustmark to pay a civil money penalty of $5 million, $4 million of 
which would be remitted as a penalty paid to the Office of the 
Comptroller of the Currency (OCC) for FHA violations arising from the 
same conduct alleged in the complaint.
LendUp Loans
    On September 8, 2021, the CFPB filed a lawsuit in the United States 
District Court for the Northern District of California against LendUp 
Loans, LLC. LendUp is an online lender offering single-payment and 
installment loans to consumers.\4\ In addition to other violations of 
consumer protection laws, the CFPB alleged that LendUp failed to timely 
issue required adverse-action notices and failed to provide accurate 
denial reasons on its adverse-action notices to thousands of loan 
applicants, in violation of ECOA and Regulation B, and that these 
violations also constitute violations of the CFPA.
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    \4\ Consumer Fin. Prot. Bureau, LendUp Loans, LLC, (https://www.consumerfinance.gov/enforcement/actions/lendup-loans-llc-2/).
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    On December 21, 2021, the CFPB filed a proposed stipulated final 
judgment and order to settle the lawsuit, which the court entered on 
December 30, 2021. The order imposes an injunction, prohibiting LendUp 
from offering or providing consumer credit, or assisting others that 
are offering or providing consumer credit; from collecting on, selling, 
or assigning outstanding subject loans, or assisting others in doing 
so; from selling consumer information; and from making 
misrepresentations in the sale or collection of consumer debt, or 
assisting others in doing so. The order also imposes a $100,000 civil 
money penalty and requires the payment of $40.5 million in consumer 
redress, to be suspended upon payment of the civil money penalty based 
on LendUp's demonstrated inability to pay.
JPay
    On October 19, 2021, the CFPB ordered JPay to pay $4 million for 
consumer redress, prohibited JPay from engaging in the illegal conduct 
found by the CFPB, and required JPay to pay a $2

[[Page 29120]]

million civil money penalty.\5\ JPay, headquartered in Miramar, 
Florida, contracts with Federal, State and local Departments of 
Corrections around the country to provide financial products and 
services to incarcerated and formerly incarcerated individuals. JPay 
provided prepaid cards to formerly incarcerated individuals upon their 
release from prison or jail (JPay debit release card). The debit 
release cards contained the balance of funds owed to former inmates 
upon their release, including their commissary money, as well as any 
``gate money,'' which are entitlements provided pursuant to State or 
local law, policy, or regulation to ease transition to society after 
release from prison or jail. The CFPB found that JPay violated EFTA and 
its implementing Regulation E by requiring consumers to establish an 
account with the particular financial institution that issued the JPay 
debit release card as a condition of receiving a government benefit, 
namely their gate money. JPay's violations of EFTA and Regulation E 
also constituted violations of CFPA. The CFPB also found that JPay 
engaged in unfair and abusive acts and practices by causing fees to be 
imposed through its JPay debit release card on consumers who were 
required to get a JPay debit release card to access the money owed to 
them at the time of their release from prison or jail. In addition, the 
CFPB found that JPay violated the CFPA's prohibition against unfair 
acts and practices by causing some consumers to be charged fees on 
their JPay debit release card that were not authorized by their 
cardholder agreements, and the CFPA's prohibition against deceptive 
acts and practices by misrepresenting fees of some JPay debit release 
cards.
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    \5\ Consumer Fin. Prot. Bureau, JPay, LLC, (https://www.consumerfinance.gov/enforcement/actions/jpay-llc/).
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Libre by Nexus
    On February 22, 2021, the CFPB filed a lawsuit against Libre by 
Nexus (Libre).\6\ The CFPB alleges that Libre and its owners operated a 
scheme through which Libre offers to pay the immigration bonds to 
secure the release of consumers held in Federal detention centers in 
exchange for large upfront fees and hefty monthly payments, while 
concealing or misrepresenting the true costs of its services. 
Specifically, the CFPB alleges that Libre and its owners engaged in 
deceptive and abusive acts or practices in violation of the CFPA. The 
CFPB filed its complaint jointly with the Attorneys General of 
Virginia, Massachusetts, and New York. The CFPB seeks an injunction, 
damages or restitution to consumers, disgorgement of ill-gotten gains, 
and the imposition of civil money penalties.
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    \6\ Consumer Fin. Prot. Bureau, Nexus Services Inc., et al., 
(https://www.consumerfinance.gov/enforcement/actions/nexus-services-inc-et-al/).
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1.2.2 ECOA Referrals to the Department of Justice
    The CFPB must refer to DOJ a matter when it has reason to believe 
that a creditor has engaged in a pattern or practice of lending 
discrimination in violation of ECOA.\7\ The CFPB may refer other 
potential ECOA violations to DOJ as well.\8\ In 2021, the CFPB referred 
two matters to DOJ about discrimination pursuant to section 706(g) of 
ECOA. The referrals involved discrimination in mortgage origination 
policies and mortgage origination pricing based on race and national 
origin.
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    \7\ 15 U.S.C. 1691e(g).
    \8\ Id.
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1.2.3 Implementing Enforcement Orders
    When an enforcement action is resolved through a public enforcement 
order, the CFPB (together with other government entities, when 
relevant) takes steps to ensure that the respondent or defendant 
complies with the requirements of the order. Depending on the specific 
requirements of individual public enforcement orders, the CFPB may take 
steps to ensure that borrowers who are eligible for compensation 
receive remuneration and that the defendant has complied with the 
injunctive provisions of the order, including implementing a 
comprehensive fair lending CMS.
1.2.4 Pending Fair Lending Investigations
    In 2021, the CFPB had a number of ongoing and newly opened fair 
lending investigations of institutions. The CFPB investigated or is 
actively investigating potential discrimination in several markets, 
including student lending, payday lending, credit cards, small business 
lending, mortgage lending, including the unlawful practice of 
redlining, and discrimination in mortgage pricing exceptions. In 2021, 
the CFPB also investigated issues with HMDA reporting. The Bureau is 
looking into potential discriminatory conduct, including under ECOA and 
unfairness, as well as unlawful conduct targeted at vulnerable 
populations.
1.3 Fair Lending Supervision
    The CFPB's Supervision program assesses compliance with Federal 
fair lending consumer financial laws and regulations at banks and 
nonbanks over which the CFPB has supervisory authority. As a result of 
the CFPB's efforts to fulfill its fair lending mission during 2021, the 
CFPB initiated 31 fair lending examinations or targeted reviews.
    For supervisory communications issued by Supervision during 2021, 
the most frequently identified issues related to the CFPB's Prioritized 
Assessments. Through Prioritized Assessments, the CFPB continued to 
expand its supervisory approach to cover a greater number of 
institutions than its typical examination schedule allows, gain a 
greater understanding of industry responses to pandemic-related 
challenges, and help ensure that entities are attentive to practices 
that may result in consumer harm. Certain Prioritized Assessments 
evaluated fair lending risks in the small business lending market.
    In 2021, the CFPB issued several fair lending-related Matters 
Requiring Attention, directing entities to take corrective actions that 
will be monitored by the CFPB through follow-up supervisory events. 
Regarding Prioritized Assessment observations, examiners encouraged 
small business lenders to consider the fair lending risks associated 
with participation in the Paycheck Protection Program (PPP), further 
implementation of the PPP, and in any new lending program, and to 
evaluate and address any risks.
    During 2021, informed by the Director's priority to advance equity 
using all the tools Congress gave the CFPB, Supervision continued to 
develop and dedicate resources to those priorities. As a result of this 
prioritization process, the CFPB focused additional fair lending 
supervision efforts on various product lines, especially mortgage 
origination and small business lending.

2. Rulemaking and Guidance

2.1 Rulemaking

    As the CFPB focused on racial and economic equity and responding to 
the COVID-19 pandemic, the CFPB was active in rulemaking activities 
which are particularly critical for communities and individuals of 
color, women, and those who struggled to pay their mortgages or access 
small business loans as a result of the impacts of the COVID-19 
pandemic. In 2021, the CFPB also issued an NPRM on section 1071 of the 
Dodd-Frank Act (section 1071) to collect small business lending data; 
participated in interagency rulemaking to improve quality control 
standards for automated valuation models (AVM); and issued a final rule 
to establish safeguards for mortgage borrowers

[[Page 29121]]

coming out of COVID-19 related forbearances.
    The CFPB publishes an agenda of its planned rulemaking activity 
biannually, which is available at: https://www.consumerfinance.gov/rules-policy/regulatory-agenda.
2.1.1 Small Business Lending and Data Collection Rulemaking
    In the Dodd-Frank Act, Congress directed the CFPB to adopt 
regulations governing the collection of small business lending data. 
Section 1071 amended ECOA to require financial institutions to compile, 
maintain, and submit to the CFPB certain data on applications for 
credit for women-owned, minority-owned, and small businesses.
    Congress enacted section 1071 for the purpose of facilitating 
enforcement of fair lending laws and enabling communities, governmental 
entities, and creditors to identify business and community development 
needs and opportunities for women-owned, minority-owned, and small 
businesses.
    On September 1, 2021, the CFPB issued a proposed rule amending 
Regulation B to implement changes to ECOA made by section 1071.\9\ 
Consistent with section 1071, the CFPB proposed to require covered 
financial institutions to collect and to report to the CFPB data on 
applications for credit for small businesses, including those that are 
owned by women or minorities. The proposal also addresses the CFPB's 
approach to privacy interests and the publication of section 1071 data; 
shielding certain demographic data from underwriters and other persons; 
recordkeeping requirements; enforcement provisions; and the proposed 
rule's effective and compliance dates.\10\
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    \9\ The proposal was published in the Federal Register on Oct. 
8, 2021. See 86 FR 56356.
    \10\ Additional activity has occurred regarding this issue since 
the end of this reporting period: The comment period for this 
proposed rule closed on January 6, 2022.
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    More information is available at: https://www.consumerfinance.gov/1071-rule/, a page compiling key materials related to the section 1071 
rulemaking.
2.1.1 Automated Valuation Models Rulemaking
    The CFPB is participating in interagency rulemaking processes with 
the Federal Reserve Board (FRB), OCC, Federal Deposit Insurance 
Corporation (FDIC), National Credit Union Administration (NCUA), and 
Federal Housing Finance Agency (FHFA) (collectively, the Agencies) to 
develop regulations to implement the amendments made by the Dodd-Frank 
Act to the Financial Institutions Reform, Recovery, and Enforcement Act 
of 1989 (FIRREA) concerning automated valuation models. The FIRREA 
amendments require implementing regulations for quality control 
standards for AVMs. These standards are designed to ensure a high level 
of confidence in the estimates produced by the valuation models, 
protect against the manipulation of data, seek to avoid conflicts of 
interest, require random sample testing and reviews, and account for 
any other such factor that the Agencies determine to be appropriate. In 
2021, under the process established by Congress in the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), the CFPB began 
preparing the SBREFA process to consult with representatives of small 
entities likely to be affected directly by the regulations the CFPB is 
considering proposing. To address potential fair lending risk in 
models, the CFPB is considering proposing a requirement that covered 
institutions establish policies, practices, procedures, and control 
systems to ensure that their AVMs comply with applicable 
nondiscrimination laws. The Agencies will continue to work to develop a 
proposed rule to implement the Dodd-Frank Act's AVM amendments to 
FIRREA.\11\
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    \11\ Additional activity has occurred regarding this issue since 
the end of this reporting period: On February 23, 2022, the CFPB 
published the Outline of Proposals and Alternatives Under 
Consideration for the Small Business Advisory Review Panel for 
Automated Valuation Model Rulemaking. More information is available 
at: https://www.consumerfinance.gov/about-us/newsroom/cfpb-outlines-options-to-prevent-algorithmic-bias-in-home-valuations/.
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2.1.3 2021 Mortgage Servicing COVID-19 Rule
    On June 28, 2021, the CFPB issued a final rule amending certain 
provisions in Regulation X to reinforce equitable economic recovery as 
the Federal foreclosure moratoria were phased out, to help protect 
borrowers from unwelcome surprises as they exited forbearance, to 
prevent unnecessary foreclosures, and to support the housing market's 
smooth and orderly transition to post-pandemic operation.\12\ The rule 
established temporary special safeguards (which expired on January 1, 
2022) to help ensure that borrowers were evaluated for all options, 
including loan modifications and selling their homes. Other temporary 
protections in the rule, such as a provision permitting mortgage 
servicers to offer certain COVID-19-related streamlined loan 
modifications based on the evaluation of an incomplete application, 
remain in effect. The rule covers loans on principal residences and 
generally excludes small servicers. The rule took effect on August 31, 
2021.
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    \12\ Consumer Fin. Prot. Bureau, Protections for Borrowers 
Affected by the COVID-19 Emergency Under the Real Estate Settlement 
Procedures Act (RESPA), Regulation X (June 28, 2021), https://files.consumerfinance.gov/f/documents/cfpb_covid-mortgage-servicing_final-rule_2021-06.pdf.
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2.2 Guidance

    The CFPB issues guidance to its various stakeholders in many forms, 
including interpretive rules, advisory opinions, statements, bulletins, 
publications such as Supervisory Highlights, and other resources to aid 
in compliance.
    In 2021, the CFPB released an interpretive rule confirming that 
ECOA's prohibitions on sex discrimination extend to sexual orientation 
and gender identity; a statement on how to best serve those who are 
limited English proficient; and a bulletin pertaining to supervision 
and enforcement priorities related to housing insecurity. The CFPB also 
published three issues of Supervisory Highlights and a suite of 
resources pertaining to HMDA reporting and filing.
2.2.1 Interpretive Rule Regarding Sexual Orientation and Gender 
Identity
    On March 9, 2021, the CFPB issued an interpretive rule stating that 
the prohibition against sex discrimination under ECOA and Regulation B 
includes sexual orientation discrimination and gender identity 
discrimination.\13\ This prohibition also covers discrimination based 
on actual or perceived nonconformity with traditional sex- or gender-
based stereotypes, and discrimination based on an applicant's 
associations. This interpretive rule explains that lenders cannot 
discriminate based on sexual orientation or gender identity, and is 
consistent with the Supreme Court's 2020 decision in Bostock v. Clayton 
County, Georgia, where the Court ruled that the prohibition against sex 
discrimination in Title VII of the Civil Rights Act of 1964 (Title VII) 
encompasses sexual orientation discrimination and gender identity 
discrimination.
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    \13\ Consumer Fin. Prot. Bureau, Equal Credit Opportunity 
(Regulation B), Discrimination on the Bases of Sexual Orientation 
and Gender Identity (Mar. 9, 2021), https://files.consumerfinance.gov/f/documents/cfpb_ecoa-interpretive-rule_2021-03.pdf.

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[[Page 29122]]

2.2.2 Statement Regarding the Provision of Financial Products and 
Services to Consumers With Limited English Proficiency
    On January 13, 2021, the CFPB issued the Statement Regarding the 
Provision of Financial Products and Services to Consumers with Limited 
English Proficiency (the Statement).\14\ In recognition of the unique 
challenges faced by consumers with limited English proficiency (LEP) in 
consumer financial markets, the Statement encourages financial 
institutions to better serve all consumers, regardless of LEP status. 
The Statement provides principles and guidelines to assist financial 
institutions in complying with the Dodd-Frank Act, ECOA, and other 
applicable laws.
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    \14\ Consumer Fin. Prot. Bureau, Statement Regarding the 
Provision of Financial Products and Services to Consumers with 
Limited English Proficiency (Jan. 13, 2021), https://files.consumerfinance.gov/f/documents/cfpb_lep-statement_2021-01.pdf.
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2.2.3 Bulletin on Supervision and Enforcement Priorities Regarding 
Housing Insecurity
    On April 1, 2021, the CFPB issued a compliance bulletin warning 
mortgage servicers to take all necessary steps to prevent a wave of 
avoidable foreclosures.\15\ The Coronavirus Aid, Relief, and Economic 
Security (CARES) Act provided borrowers with federally-backed mortgages 
with access to forbearance, and private lenders have also provided 
similar assistance. Much of this aid expired in the fall. In light of 
these heightened risks to consumers in need of loss mitigation 
assistance, the CFPB focused on how mortgage servicers respond to 
borrower requests for loss mitigation assistance and process loss 
mitigation applications. The CFPB urged servicers to dedicate 
sufficient resources and staff to ensure they can communicate clearly 
with borrowers (including LEP and other vulnerable borrowers), 
effectively manage borrower requests for assistance, promote loss 
mitigation, and ultimately reduce avoidable foreclosures and 
foreclosure-related costs.
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    \15\ Consumer Fin. Prot. Bureau, Bulletin 2021-02: Supervision 
and Enforcement Priorities Regarding Housing Insecurity (Apr. 1, 
2021), https://files.consumerfinance.gov/f/documents/cfpb_bulletin-2021-02_supervision-and-enforcement-priorities-regarding-housing_WHcae8E.pdf.
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2.2.4 Supervisory Highlights
    The CFPB's Supervisory Highlights reports provide guidance and 
general information about the CFPB's supervisory activities at banks 
and nonbanks without identifying specific entities. These reports 
communicate the CFPB's key examination findings and operational changes 
to the CFPB's supervision program. Supervisory Highlights is also a 
convenient and easily accessible resource for information on the CFPB's 
recent guidance documents. In 2021, the CFPB published three issues of 
Supervisory Highlights.\16\
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    \16\ Issue 23, COVID-19 Prioritized Assessments Special Edition; 
Issue 24, Summer 2021; Issue 25, Fall 2021.
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    Issue 23, COVID-19 Prioritized Assessments Special Edition was 
released on January 19, 2021.\17\ This special edition sought to inform 
the public of observations in the CFPB's Prioritized Assessment 
supervisory work conducted in 2020 after the sudden onset of the COVID-
19 pandemic. The Prioritized Assessments focused on evaluating risks to 
consumers resulting from the pandemic. Examiners identified several 
issues in small business lending that may pose fair lending risk. These 
findings included policies that limited eligibility for PPP loans to 
existing customers of the institution, and thereby restricted access to 
PPP loans beyond the eligibility requirements of the CARES Act and 
orders issued by the Small Business Administration (SBA). Examiners 
found that these additional requirements or limitations, commonly known 
as ``overlays,'' may have had a disproportionate impact on a prohibited 
basis and presented heightened fair lending risk.\18\
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    \17\ Consumer Fin. Prot. Bureau, Issue 23, COVID-19 Prioritized 
Assessments Special Edition (Jan. 2021), https://files.consumerfinance.gov/f/documents/cfpb_supervisory-highlights_issue-23_2021-01.pdf.
    \18\ Examiners did not, however, conduct a full analysis of any 
institution's overlay, and did not make any determination about 
whether an institution's use of the overlay complies with ECOA or 
Regulation B. Examiners encouraged the small business lenders to 
consider the fair lending risks associated with participation in the 
PPP, in further implementation of the PPP, and in any new lending 
program and to evaluate and address any risks.
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    On June 29, 2021, the CFPB released the 24th edition of Supervisory 
Highlights.\19\ The findings included in this report cover examinations 
completed between January 1, 2020 to December 31, 2020. In one or more 
institutions, examiners uncovered errors in reporting of HMDA data, 
often tied to deficient CMS. Offending institutions were required to 
review, correct, and resubmit their data, as well as enhance their 
monitoring practices and make improvements to their CMS. Examiners also 
uncovered an institution engaging in the unlawful practice of 
redlining. The CFPB referred the matter to DOJ and is considering 
additional actions. The lender plans to undertake remedial and 
corrective actions regarding this violation, which are under review by 
the CFPB.
---------------------------------------------------------------------------

    \19\ Consumer Fin. Prot. Bureau, Issue 25, Fall 2021 (Dec. 8, 
2021), https://www.consumerfinance.gov/data-research/research-reports/supervisory-highlights-issue-24-summer-2021/.
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    The CFPB released the 25th edition of Supervisory Highlights on 
December 8, 2021, covering examinations completed between January 2021 
and June 2021.\20\ The findings included observations that mortgage 
lenders violated ECOA and Regulation B by discriminating against 
African American and female borrowers in the granting of pricing 
exceptions. In response to these findings, lenders plan to undertake 
remedial and corrective actions regarding these violations, which are 
under review by the CFPB. Examiners also found that lenders violated 
ECOA and Regulation B by improperly inquiring about small business 
applicants' religion and by considering an applicant's religion in the 
credit decision. For religious institutions applying for small business 
loans, lenders utilized a questionnaire which contained explicit 
inquiries about the applicant's religion. Examiners determined that 
lenders also denied credit to an applicant identified as a religious 
institution because the applicant did not respond to the questionnaire. 
In response to these findings, lenders updated the questionnaire to 
ensure compliance with ECOA and Regulation B. In addition, lenders also 
identified affected applicants and provided an offer for each 
identified applicant to reapply for a small business loan.
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    \20\ Consumer Fin. Prot. Bureau, Issue 25, Fall 2021 (Dec. 8, 
2021), https://www.consumerfinance.gov/documents/10279/cfpb_supervisory-highlights_issue-25_2021-12.pdf.
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    All issues of Supervisory Highlights are available at: https://www.consumerfinance.gov/compliance/supervisory-highlights/.
2.2.5 HMDA Guidance and Resources
    Given the importance of accurately reported HMDA data to the CFPB's 
fair lending mission, the CFPB maintains a comprehensive suite of 
resources on its public website to help filers fulfill their reporting 
requirements under HMDA and Regulation C and to allow others to 
evaluate and study mortgage lending. These resources include: An 
Executive Summary of HMDA rule changes; \21\ Small Entity Compliance 
Guide; \22\ Key

[[Page 29123]]

Dates Timeline; \23\ Institutional and Transactional Coverage Charts; 
\24\ Reportable HMDA Data Chart; \25\ sample data collection form; \26\ 
FAQs; \27\ and downloadable webinars,\28\ which provide an overview of 
the HMDA rule. The CFPB also provides on its website an interactive 
version of Regulation C that is easier to access and navigate than the 
printed version of Regulation C.\29\
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    \21\ Consumer Fin. Prot. Bureau, Executive Summary of the 2020 
Home Mortgage Disclosure Act (Regulation C) Final Rule (Apr. 16, 
2020), https://files.consumerfinance.gov/f/documents/cfpb_hmda_executive-summary_2020-04.pdf.
    \22\ Consumer Fin. Prot. Bureau, Home Mortgage Disclosure 
(Regulation C) Small Entity Compliance Guide (May 2020), https://files.consumerfinance.gov/f/documents/cfpb_hmda_small-entity-compliance-guide.pdf.
    \23\ Consumer Fin. Prot. Bureau, HMDA Rule Key Dates Timeline, 
January 1, 2020 to December 31, 2022, https://files.consumerfinance.gov/f/documents/cfpb_hmda-key-dates-timeline-2020-2022.pdf.
    \24\ Consumer Fin. Prot. Bureau, HMDA Institutional Coverage 
Chart, https://www.consumerfinance.gov/documents/9568/cfpb_2020-hmda-institutional-coverage_03-2021.pdf; Consumer Fin. Prot. Bureau, 
HMDA Transactional Coverage Chart, https://www.consumerfinance.gov/documents/8724/cfpb_2020-hmda-transactional-coverage.pdf.
    \25\ Consumer Fin. Prot. Bureau, Reportable HMDA Data: A 
Regulatory and Reporting Overview Reference Chart for HMDA Data 
Collected in 2021, https://files.consumerfinance.gov/f/documents/cfpb_2021-reportable-hmda-data.pdf.
    \26\ Consumer Fin. Prot. Bureau, Sample Data Collection Form, 
https://files.consumerfinance.gov/f/documents/201708_cfpb_hmda-sample-data-collection-form.pdf.
    \27\ Consumer Fin. Prot. Bureau, Home Mortgage Disclosure Act 
FAQs, https://www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/hmda-reporting-requirements/home-mortgage-disclosure-act-faqs/.
    \28\ Consumer Fin. Prot. Bureau, HMDA Webinars, https://www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/hmda-reporting-requirements/webinars/.
    \29\ See, Interactive Bureau Regulations, Regulation C, https://www.consumerfinance.gov/rules-policy/regulations/1003/.
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    Together with the Federal Financial Institutions Examination 
Council (FFIEC),\30\ the CFPB also routinely updates its HMDA resources 
throughout the year to ensure HMDA reporters have the most up-to-date 
information. For example, in October 2021, the CFPB released the 2022 
Filing Instructions Guide \31\ and the 2021 Supplemental Guide for 
Quarterly Filers.\32\ Together with the FFIEC, in March 2021, the CFPB 
also published the 2021 edition of the HMDA Getting it Right Guide.\33\ 
The CFPB also works with the FFIEC to publish data submission resources 
for HMDA filers and vendors on its Resources for HMDA Filers website, 
https://ffiec.cfpb.gov.
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    \30\ Collectively, the Board of Governors of the Federal Reserve 
System (FRB), the Federal Deposit Insurance Corporation (FDIC), the 
National Credit Union Administration (NCUA), the Office of the 
Comptroller of the Currency (OCC), and the CFPB comprise the Federal 
Financial Institutions Examination Council (FFIEC). The State 
Liaison Committee was added to FFIEC in 2006 as a voting member. 
Federal Fin. Instit. Examination Council, http://www.ffiec.gov (last 
visited Mar. 11, 2022).
    \31\ Consumer Fin. Prot. Bureau, Filing instructions guide for 
HMDA data collected in 2022 (Oct. 2021), https://s3.amazonaws.com/cfpb-hmda-public/prod/help/2022-hmda-fig.pdf.
    \32\ Consumer Fin. Prot. Bureau, Supplemental Guide for 
Quarterly Filers for 2022 (Sep. 2021), https://s3.amazonaws.com/cfpb-hmda-public/prod/help/supplemental-guide-for-quarterly-filers-for-2022.pdf.
    \33\ Federal Fin. Instit. Examination Council, A Guide to HMDA 
Reporting, Getting it Right! (Mar. 22, 2021), https://www.ffiec.gov/hmda/pdf/2021Guide.pdf.
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    In addition, HMDA reporters can ask questions about HMDA and 
Regulation C, including how to submit HMDA data, by emailing the CFPB's 
HMDA Help at <a href="/cdn-cgi/l/email-protection#5810151c19103d3428183b3e283a763f372e"><span class="__cf_email__" data-cfemail="f1b9bcb5b0b9949d81b192978193df969e87">[email protected]</span></a>. The CFPB also offers financial 
institutions, service providers, and others, informal staff guidance on 
specific questions about the statutes and rules the CFPB implements, 
including ECOA and Regulation B and HMDA and Regulation C, through its 
Regulation Inquiries platform at www.reginquiries.consumerfinance.gov.

3. Stakeholder Engagement

    The CFPB robustly engages with external stakeholders including 
consumer advocates, civil rights organizations, industry, academia, and 
other government agencies. This engagement comes in varied forms, 
including broadcasting the CFPB's work and policy priorities through 
CFPB channels like blogs, videos, press releases, or speeches; reaching 
out directly to advocates and consumers through website updates, 
issuing Requests for Information (RFIs), hosting tech sprints, and 
ordering entities to engage with the CFPB. The CFPB also regularly 
issues numerous reports analyzing data and market conditions. To 
further an all-of-government approach to fair lending enforcement, the 
CFPB also participates in interagency groups. All of these engagements 
are critical to informing the CFPB's work and broadcasting the CFPB's 
priorities and recent work to its stakeholders.

3.1 Promoting and Broadcasting the Fair Lending and Access to Credit 
Mission

3.1.1 CFPB Blog Posts, Press Releases, Videos, and Other Communications
    The CFPB regularly uses blog posts, statements, press releases, 
videos, guides, brochures, social media, and other tools to timely and 
effectively communicate with stakeholders. These tools are targeted to 
individuals, advocates, civil rights organizations, government 
agencies, small business owners, financial institutions, and other 
stakeholders to promote and broadcast news and information about 
emerging fair lending issues, areas of concern, CFPB initiatives, and 
more.
    In 2021, the CFPB published 10 blog posts related to fair lending 
topics including: The publication of the LEP statement; \34\ team 
presentations from the CFPB's tech sprints; \35\ the publication of the 
2020 Fair Lending Annual Report; \36\ the CFPB's commitment to racial 
and economic equity; \37\ a report analyzing differences in lending 
patterns for lenders below and above the 100-loan closed-end threshold 
set by the 2020 HMDA rule; \38\ a report on Asian American and Pacific 
Islanders in the Mortgage Market; \39\ the CFPB's prioritization of 
resources to focus on the role of racial bias in home appraisals; \40\ 
mortgage servicers' communication capabilities and outreach efforts for 
borrowers; \41\ updates to the whistleblower page; \42\ and the CFPB's 
Amicus brief in Fralish v. Bank of America.\43\
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    \34\ Kathleen L. Kraninger, Bureau takes additional steps to 
foster an inclusive financial system (Jan. 13, 2021), https://www.consumerfinance.gov/about-us/blog/bureau-takes-additional-steps-to-foster-an-inclusive-financial-system/.
    \35\ Dave Uejio, Innovation and collaboration: Tech sprints 
support improvements in consumer notifications and data collection 
and processing (Apr. 26, 2021), https://www.consumerfinance.gov/about-us/blog/innovation-and-collaboration-tech-sprints-support-improvements-consumer-notifications-data-collection-processing/.
    \36\ Patrice Alexander Ficklin, Frank Vespa-Papaleo, Protecting 
consumers through a pandemic: 2020 Fair Lending Report to Congress 
(Apr. 14, 2021), https://www.consumerfinance.gov/about-us/blog/2020-fair-lending-report-to-congress/.
    \37\ Dave Uejio, Addressing racial inequities in consumer 
finance markets (June 2, 2021), https://www.consumerfinance.gov/about-us/blog/addressing-racial-inequities-consumer-finance-markets/.
    \38\ Feng Liu and Alex Rodrigue, HMDA Threshold Report Blog 
(June 14, 2021), https://www.consumerfinance.gov/about-us/blog/hmda-threshold-report-blog/.
    \39\ Alexandra Dobre and Young Jo, Challenging the Model 
Minority Myth: A closer look at Asian American and Pacific Islanders 
in the mortgage market (July 1, 2021), https://www.consumerfinance.gov/about-us/blog/challenging-model-minority-myth-asian-american-pacific-islanders-mortgage-market/.
    \40\ Patrice Alexander Ficklin, CFPB Prioritizing Resources 
Against Racial Bias in Home Appraisals (July 2, 2021), https://www.consumerfinance.gov/about-us/blog/cfpb-prioritizing-resources-against-racial-bias-home-appraisals/.
    \41\ Consumer Fin. Prot. Bureau, New rule ensures mortgage 
servicers provide options to potentially vulnerable borrowers 
exiting forbearance (Sep. 30, 2021), https://www.consumerfinance.gov/about-us/blog/new-rule-ensures-mortgage-servicers-provide-options-potentially-vulnerable-borrowers-exiting-forbearance/.
    \42\ Erie Meyer, CFPB calls tech workers to action (Dec. 15, 
2021), CFPB calls tech workers to action [verbar] Consumer Financial 
Protection Bureau (consumerfinance.gov).
    \43\ Seth Frotman, CFPB is standing up for civil rights 
protections (Dec. 17, 2021), https://www.consumerfinance.gov/about-us/blog/cfpb-standing-up-civil-rights-protections/.

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[[Page 29124]]

    In 2021, the CFPB also issued 12 press releases related to fair 
lending and access to credit issues, including: The Libre by Nexus 
enforcement action; \44\ the sexual orientation and gender identity 
interpretive rule; \45\ the Interagency RFI on Artificial Intelligence 
(AI); \46\ the availability of the 2020 HMDA Data; \47\ the extension 
of the comment period for the AI RFI; \48\ the proposed small business 
lending rule; \49\ two press releases related to the LendUp enforcement 
action; \50\ the JPay enforcement action; \51\ the CFPB's orders to 
tech giants to turn over information on their payment system plans; 
\52\ the Trustmark enforcement matter; \53\ and the RFI to seek input 
on detecting discrimination in mortgage lending.\54\
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    \44\ Consumer Fin. Prot. Bureau, Consumer Financial Protection 
Bureau and Virginia, Massachusetts, and New York Attorneys General 
Sue Libre for Predatory Immigrant-Services Scam (Feb. 22, 2021), 
https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-and-virginia-massachusetts-and-new-york-attorneys-general-sue-libre-for-predatory-immigrant-services-scam/.
    \45\ Consumer Fin. Prot. Bureau, CFPB Clarifies That 
Discrimination by Lenders on the Basis of Sexual Orientation and 
Gender Identity Is Illegal (Mar. 9, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-clarifies-discrimination-by-lenders-on-basis-of-sexual-orientation-and-gender-identity-is-illegal/.
    \46\ Consumer Fin. Prot. Bureau, Agencies Seek Wide Range of 
Views on Financial Institutions' Use of Artificial Intelligence 
(Mar. 29, 2021), https://www.consumerfinance.gov/about-us/newsroom/agencies-seek-wide-range-of-views-on-financial-institutions-use-of-artificial-intelligence/.
    \47\ Consumer Fin. Prot. Bureau, 2020 HMDA Data on Mortgage 
Lending Now Available (Mar. 31, 2021), https://www.consumerfinance.gov/about-us/newsroom/2020-hmda-data-on-mortgage-lending-now-available/.
    \48\ Consumer Fin. Prot. Bureau, Agencies Extend Comment Period 
on Request for Information on Artificial Intelligence (May 17, 
2021), https://www.consumerfinance.gov/about-us/newsroom/agencies-extend-comment-period-on-request-for-information-on-artificial-intelligence/.
    \49\ Consumer Fin. Prot. Bureau, CFPB Proposes Rule to Shine New 
Light on Small Businesses' Access to Credit (Sep. 1, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-rule-to-shine-new-light-on-small-businesses-access-to-credit/.
    \50\ Consumer Fin. Prot. Bureau, CFPB Sues LendUp Loans for 
Violating 2016 Consent Order and Deceiving Borrowers (Sep. 8, 2021), 
https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-lendup-loans-for-violating-2016-consent-order-and-deceiving-borrowers/; 
Consumer Fin. Prot. Bureau, CFPB Shutters Lending by VC-Backed 
Fintech for Violating Agency Order (Dec. 21, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-shutters-lending-by-vc-backed-fintech-for-violating-agency-order/.
    \51\ Consumer Fin. Prot. Bureau, CFPB Penalizes JPay for 
Siphoning Taxpayer-Funded Benefits Intended to Help People Re-enter 
Society After Incarceration (Oct. 19, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-penalizes-jpay-for-siphoning-taxpayer-funded-benefits-intended-to-help-people-re-enter-society-after-incarceration/.
    \52\ Consumer Fin. Prot. Bureau, CFPB Orders Tech Giants to Turn 
Over Information on their Payment System Plans (Oct. 21, 2021), 
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-tech-giants-to-turn-over-information-on-their-payment-system-plans/.
    \53\ Consumer Fin. Prot. Bureau, CFPB, DOJ and OCC Take Action 
Against Trustmark National Bank for Deliberate Discrimination 
Against Black and Hispanic Families (Oct. 22, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-doj-and-occ-take-action-against-trustmark-national-bank-for-deliberate-discrimination-against-black-and-hispanic-families/.
    \54\ Consumer Fin. Prot. Bureau, CFPB Seeks Input on Detecting 
Discrimination in Mortgage Lending (Nov. 16, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-seeks-input-on-detecting-discrimination-in-mortgage-lending/.
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    In addition, the CFPB produced two fair lending-related videos in 
2021, one by Acting Director Uejio on racial inequities in consumer 
finance markets,\55\ and one by Fair Lending Director Patrice Ficklin 
promoting the small business tell your story portal.\56\
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    \55\ Consumer Fin. Prot. Bureau, Director's Message: Addressing 
financial discrimination & racial equity (June 3, 2021), https://www.youtube.com/watch?app=desktop&v=tFVyvqVCr1A&feature=youtu.be.
    \56\ Consumer Fin. Prot. Bureau, Share your small business story 
(Sep. 1, 2021), https://www.youtube.com/watch?app=desktop&v=rVti779N8wE&feature=youtu.be.
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    On August 17, 2021, the CFPB published a revised Focus on Reentry: 
Criminal Justice Guide as a part of the CFPB's Your Money, Your Goals 
financial empowerment resources.\57\ The Guide is designed to help 
frontline staff address the unique challenges of individuals involved 
in the criminal justice system.
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    \57\ Consumer Fin. Prot. Bureau, Focus on Reentry: Criminal 
Justice Guide (July 2021), https://files.consumerfinance.gov/f/documents/cfpb_ymyg_reentry_supplement.pdf.
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    Also, in 2021, the CFPB updated two brochures \58\ on credit 
discrimination, titled Know Your Rights, Credit Discrimination is 
Illegal and Helping Consumers Spot Credit Discrimination. The brochures 
target consumers as well as those who work with consumers. The 
brochures are available in English, Spanish, Chinese, Vietnamese, 
Korean, Tagalog, Russian, Haitian Creole, and Arabic.
---------------------------------------------------------------------------

    \58\ Consumer Fin. Prot. Bureau, What protections do I have 
against credit discrimination? https://www.consumerfinance.gov/fair-lending/.
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3.1.2 CFPB Engagements With Stakeholders
    The CFPB often engages directly with stakeholders to inform the 
CFPB's policy decisions and message the CFPB's priorities and recent 
work. In 2021, CFPB staff participated in 236 stakeholder engagements 
related to fair lending and access to credit issues. Through speeches, 
presentations, podcasts, roundtables, webinars, and other smaller 
discussions on fair lending topics, the CFPB strives to keep abreast of 
economic and market realities that impact the lives of individuals and 
communities the CFPB is charged with protecting.
    For example, on June 15, 2021, the CFPB hosted a public roundtable 
to look closer at the role of racial bias in home appraisals.\59\ At 
the roundtable, the CFPB heard from civil rights activists, consumer 
advocates, and local leaders who see the impacts of these biases in 
their communities. The roundtable also included partner agencies, 
including the NCUA, the OCC, and the Department of Housing and Urban 
Development (HUD). Additionally, Director Chopra hosted other 
roundtables in 2021 with consumer groups that pertained to fair 
lending-related issues.
---------------------------------------------------------------------------

    \59\ A recording of the event can be accessed at: https://www.consumerfinance.gov/about-us/events/archive-past-events/virtual-home-appraisal-bias-event/.
---------------------------------------------------------------------------

    Throughout 2021, numerous other engagements centered around racial 
and economic equity issues; COVID-19 impacts on consumers; traditional 
and digital redlining, to include algorithmic bias issues; special 
purpose credit programs; the section 1071 rulemaking governing small 
business lending data collection and reporting; HMDA; agricultural and 
rural lending; student lending; and credit reporting.
3.1.3 Website Updates
    On September 1, 2021, the CFPB launched a new landing page for 
small business owners and entrepreneurs. Titled, ``Shining a light on 
small business lending,'' the landing page highlights statistics about 
small businesses and provides numerous resources on how to start and 
grow a small business for small business owners and entrepreneurs. The 
landing page also has information about lending discrimination and how 
ECOA protects small businesses, including minority-owned and women-
owned businesses, against discrimination. The page also provides a way 
for small business owners and entrepreneurs to communicate directly 
with the CFPB with a ``Share your small business story'' portal. This 
portal allows small business owners to share their experiences with 
trying to get a small business loan. In conjunction with broader small 
business lending data collection rulemaking efforts (see section 
2.1.1), this information will help inform the CFPB's work to protect 
small business owners and create a fairer marketplace. The web page is 
available at: consumerfinance.gov/about-us/small-business-lending.
    In a call to action targeted at tech workers such as engineers, 
data

[[Page 29125]]

scientists, and others having detailed knowledge of algorithms and 
technologies used by industry, on December 15, 2021, the CFPB announced 
that the whistleblower web page was redesigned. This redesign better 
supports the CFPB's mission in a rapidly evolving consumer financial 
market, which ensures that all credible tips, including those that 
involve technology or implicate fair lending, receive appropriate 
analysis and investigation. The web page is available at: https://www.consumerfinance.gov/enforcement/information-industry-whistleblowers/.
    In May of 2021, the CFPB launched a new racial equity landing page 
as a resource and repository of racial equity content. The page 
includes information about the pandemic's effects on underserved 
communities, housing insecurity issues, as well as the CFPB's 
responsive work in these areas. This web page is a resource for 
individuals, advocates, and others. The web page is available at: 
https://www.consumerfinance.gov/about-us/racial-equity.
    Throughout 2021, the CFPB continued to manage an interagency 
housing portal which serves as a repository of resources for 
homeowners, renters, and landlords, available in seven languages. The 
portal includes a rental assistance finder, which helps renters locate 
and contact organizations that may be able to provide support for 
COVID-19 related rent shortfalls, past due utility bills, and moving 
expenses. The portal also provides resources for those who may have 
lost their housing. The web page is available at: https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/.

3.2 Seeking Information

3.2.1 Requests for Information
    On March 29, 2021, the CFPB, the OCC, the FRB, the FDIC, and the 
NCUA published an RFI seeking information from the public on how 
financial institutions use AI in their activities, including fraud 
prevention, personalization of customer services, credit underwriting, 
and other operations. More specifically, the RFI sought comments to 
better understand the use of AI, including machine learning, by 
financial institutions; appropriate governance, risk management, and 
controls over AI; and challenges in developing, adopting, and managing 
AI. On May 17, 2021, the agencies announced that they extended the 
comment period on the RFI.\60\ The comment period closed on July 1, 
2021.
---------------------------------------------------------------------------

    \60\ Consumer Fin. Prot. Bureau, Request for Information and 
Comment on Financial Institutions' Use of Artificial Intelligence, 
including Machine Learning (May 17, 2021), https://files.consumerfinance.gov/f/documents/cfpb_ai-rfi_frn_2021-03.pdf.
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    On November 16, 2021, the CFPB issued an RFI seeking input on rules 
implementing HMDA in order to conduct an assessment of the 2015 HMDA 
Rule and related amendments.\61\ The CFPB requested public comment on 
its plans for the assessment as well as certain recommendations and 
information that may be useful in conducting the planned assessment. 
The RFI specifically sought information on institutional and 
transactional coverage; data points; benefits of the new data and 
disclosure requirements; and operational and compliance costs.
---------------------------------------------------------------------------

    \61\ Consumer Fin. Prot. Bureau, Request for Information 
Regarding the HMDA Rule Assessment (Nov. 16, 2021), https://files.consumerfinance.gov/f/documents/cfpb_hmda-rule-assessment_rfi_2021-11.pdf.
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3.2.2 HMDA Tech Sprint: Improving HMDA Data Submissions and Publishing
    On March 22-26, 2021, the CFPB held its second tech sprint which 
focused on improvements to submitting and publishing HMDA data. 
Participants in this tech sprint were invited to help create additional 
tools for users on the HMDA Platform and to develop and document HMDA 
Platform Applicant Programming Interfaces, known as the ``Publications 
Track.'' Alternatively, participants were able to develop additional 
enhancements to HMDA data products and services, or new ways to 
interact with existing products, data analysis capabilities, or 
interfaces to other datasets, known as the ``Submissions Track.'' 
Seventeen teams participated during the tech sprint, which concluded 
with a demonstration day where each team presented their resulting 
innovations to a panel of experts who reviewed them on creativity and 
innovation; effectiveness and impact; and market readiness.
    Recordings of the team presentations are available at: https://www.consumerfinance.gov/rules-policy/innovation/cfpb-tech-sprints/home-mortgage-disclosure-act-tech-sprint/.
3.2.3 Big Tech Orders
    On October 21, 2021, the CFPB issued a series of orders pursuant to 
section 1022(c)(4) of the CFPA to large technology companies (Big Tech) 
operating payments systems to collect information on their business 
practices.\62\ This information will help the CFPB better understand 
how these firms use personal payments data and manage data access to 
users so the CFPB can ensure adequate consumer protection. 
Specifically, the orders sought information on data harvesting and 
monetization, access restriction and user choice, and other consumer 
protections.
---------------------------------------------------------------------------

    \62\ Consumer Fin. Prot. Bureau, Order To File Information On 
Payments Products (Oct. 21, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-tech-giants-to-turn-over-information-on-their-payment-system-plans/.
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3.3 Data and Reports

3.3.1 Availability of 2020 HMDA Data
    The HMDA data are the most comprehensive publicly available 
information on mortgage market activity. The data are used by consumer 
groups, regulators, industry, and others to assess potential fair 
lending risks and for other purposes.
    On March 31, 2021, the CFPB announced the availability of the 2020 
HMDA modified loan application register data on the FFIEC's HMDA 
Platform for approximately 4,400 HMDA filers.\63\ These published data 
contain loan-level information filed by financial institutions, 
modified to protect privacy.
---------------------------------------------------------------------------

    \63\ Consumer Fin. Prot. Bureau, 2020 HMDA Data on Mortgage 
Lending Now Available (Mar. 31, 2021), https://www.consumerfinance.gov/about-us/newsroom/2020-hmda-data-on-mortgage-lending-now-available/.
---------------------------------------------------------------------------

    On June 17, 2021, the FFIEC announced the availability of 
additional data on 2020 mortgage lending transactions at 4,475 
financial institutions reported under HMDA.\64\ This data included a 
total of 48 data points providing information about the applicants, the 
property securing the loan or proposed to secure the loan in the case 
of non-originated applications, the transaction, and identifiers.
---------------------------------------------------------------------------

    \64\ Consumer Fin. Prot. Bureau, FFIEC Announces Availability of 
2020 Data on Mortgage Lending (June 17, 2021), https://www.consumerfinance.gov/about-us/newsroom/ffiec-announces-availability-of-2020-data-on-mortgage-lending/.
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3.3.2 A Brief Note on General Lending Patterns of Small to Medium Size 
Closed-End HMDA Reporters
    The CFPB released a report analyzing differences in lending 
patterns for lenders below and above the 100-loan closed-end threshold 
set by the 2020 HMDA rule.\65\ Released on June 14, 2021, the report, 
though preliminary,\66\

[[Page 29126]]

found some differences in lending patterns for lenders above and below 
the threshold. In general, those lenders newly exempted under the 2020 
HMDA Rule (i.e., with annual origination volumes that exceed the 25-
loan threshold but fall below the 100-loan threshold) do not appear to 
be more or less likely to lend to Black and non-white Hispanic 
borrowers than larger volume lenders. There is some evidence that these 
lenders might be more likely to lend to non-natural persons, i.e., 
trusts, corporations or partnerships. The analysis also suggests that a 
higher percentage of their loans are secured by properties in low-to-
moderate income census tracts, properties in rural areas, second liens, 
and investment properties. Their borrowers also appear to have higher 
incomes than larger lenders' borrowers as well.
---------------------------------------------------------------------------

    \65\ Consumer Fin. Prot. Bureau, A Brief Note on General Lending 
Patterns of Small to Medium Size Closed-end HMDA Reporters (June 14, 
2021), https://files.consumerfinance.gov/f/documents/cfpb_general-lending-patterns-hmda-reporters_report_2021-06.pdf.
    \66\ The analysis in this report is necessarily limited and 
preliminary and is not an assessment by the CFPB as to the 
effectiveness of the thresholds change in meeting HMDA's objectives. 
Additional analysis is needed to better understand these findings 
and to explore the impact of the threshold changes on data available 
for specific markets.
---------------------------------------------------------------------------

Data Point: Asian Americans and Pacific Islanders in the Market
    On July 1, 2021, the CFPB released a report examining the 
differences in mortgage characteristics within the Asian American and 
Pacific Islanders (AAPI) population.\67\ The ``Model Minority myth'' 
characterizes this expansive demographic group as a monolithic group, 
with uniform high achievement and high income, relatively untouched by 
racial and ethnic discrimination. Using the 2020 HMDA data, the report 
found that borrowers who identified their AAPI subgroup as Asian Indian 
or Chinese paid lower interest rates than non-Hispanic white borrowers. 
In contrast, Hawaiian or Pacific Islanders (HoPIs), as a group, paid 
higher interest rates and loan costs when compared to other Asian 
borrowers, with considerable variation within subgroups of HoPIs. 
Denial rates varied across AAPI subgroups, with some subgroups and 
HoPIs being denied at rates similar to denial rates for Black and 
Hispanic white borrowers, further challenging the myth that the AAPI 
population does not experience racial and ethnic discrimination in the 
mortgage market. Even though AAPIs, on average, had lower interest 
rates, homeownership rates generally lag those of non-Hispanic whites. 
This lag in homeownership, as well as the variability in denial rates 
and loan costs, could have implications for the ability of AAPI 
communities to build wealth and stability.
---------------------------------------------------------------------------

    \67\ Consumer Fin. Prot. Bureau, Data Point: Asian American and 
Pacific Islanders in the Mortgage Market (July 1, 2021), https://www.consumerfinance.gov/documents/9852/cfpb_aapi-mortgage-market_report_2021-07.pdf.
---------------------------------------------------------------------------

Data Point: 2020 Mortgage Market Activity and Trends
    On August 19, 2021, the CFPB released a report on residential 
mortgage lending trends.\68\ The report found that the total number of 
closed-end originations as well as applications increased substantially 
between 2019 and 2020. Most of the increase was driven by the refinance 
boom observed in 2020. The report also notes that, while the number of 
financial institutions reporting 2020 HMDA data declined compared to 
2019, the number of closed-end records in 2020 increased compared to 
the previous year. While mortgage activity generally increased, year 
over year, significant differences between demographic groups 
persisted, including higher interest rates and denials among Black and 
Hispanic consumers in the mortgage market.
---------------------------------------------------------------------------

    \68\ Consumer Fin. Prot. Bureau, Data Point: 2020 Mortgage 
Market Activity and Trends (Aug. 19, 2021), https://www.consumerfinance.gov/documents/10009/cfpb_2020-mortgage-market-activity-trends_report_2021-08.pdf.
---------------------------------------------------------------------------

Manufactured Housing Finance: New Insights From HMDA Data Report
    On May 27, 2021, the CFPB released a report examining the 
differences between mortgage loans for site-built homes, mortgage loans 
for manufactured homes (referred to as ``MH mortgages''), and chattel 
loans for manufactured homes.\69\ Comparison of these three financing 
types finds that borrowers with chattel loans face higher denial rates 
when applying for financing than manufactured housing mortgage and 
site-built borrowers. When they do get a loan, these borrowers pay 
higher interest rates than their MH mortgage and site-built 
counterparts and are also less likely to refinance. Analysis shows that 
Black, Hispanic, and American Indian and Alaska Native borrowers are 
more likely to get chattel loans than their non-Hispanic white 
counterparts, even when controlling for land ownership. Additionally, 
the market for MH lending--and chattel in particular--is more 
concentrated among relatively few lenders than the market for mortgages 
on site-built homes.
---------------------------------------------------------------------------

    \69\ Consumer Fin. Prot. Bureau, Manufactured Housing Finance: 
New Insights from the Home Mortgage Disclosure Act Data (Aug. 19, 
2021), https://www.consumerfinance.gov/documents/9806/cfpb_manufactured-housing-finance-new-insights-hmda_report_2021-05.pdf.
---------------------------------------------------------------------------

Updated Data From National Survey of Mortgage Originations
    On July 29, 2021, the CFPB and the FHFA published updated loan-
level data for public use collected through the National Survey of 
Mortgage Originations. The data provide insights into borrowers' 
experiences obtaining residential mortgages.
COVID-19 Special Issue Briefs
    As a result of the COVID-19 pandemic's uneven impacts among 
individuals and markets, the CFPB released numerous COVID-19 Special 
Issue Briefs analyzing different consumer and market segments. Two such 
reports explored and summarized the impacts on the renters and 
homeowners: Housing insecurity and the COVID-19 pandemic and 
Characteristics of Mortgage Borrowers During the COVID-19 Pandemic. 
Issued March 1, 2021, Housing insecurity and the COVID-19 pandemic 
summarized some of the relevant data and research on the impact of the 
pandemic on the rental and mortgage market, and particularly its impact 
on low income and minority households.\70\ This report found that as of 
December 2020, 11 million renter and homeowner households were 
significantly overdue on their regular housing payments, placing them 
at heightened risk of losing their homes to foreclosure or eviction. 
Black and Hispanic households were more than twice as likely to report 
being behind on their payments than white households.
---------------------------------------------------------------------------

    \70\ Consumer Fin. Prot. Bureau, Housing insecurity and the 
COVID-19 pandemic (Mar. 1, 2021), https://www.consumerfinance.gov/documents/9512/cfpb_Housing_insecurity_and_the_COVID-19_pandemic.pdf.
---------------------------------------------------------------------------

    Another Special Issue Brief, Characteristics of Mortgage Borrowers 
During the COVID-19 Pandemic, was released on May 4, 2021.\71\ This 
report explored the characteristics, including demographics, of 
mortgage borrowers in forbearance or delinquent during the COVID-19 
pandemic. The report used data from the National Mortgage Database, 
which is a random 1-in-20 sample of closed-end first-lien mortgages in 
the United States, as reported through March 2021. The data showed that 
a significant share of these borrowers were minorities, lived in 
majority-minority tracts, and lived in relatively lower-income areas. 
Many of these borrowers also may be single-income households, making it 
more difficult for them to recover from income shocks. A significant 
share of

[[Page 29127]]

borrowers also showed distress in terms of non-mortgage products.
---------------------------------------------------------------------------

    \71\ Consumer Fin. Prot. Bureau, Characteristics of Mortgage 
Borrowers During the COVID-19 Pandemic (May 4, 2021), https://www.consumerfinance.gov/documents/9695/cfpb_characteristics-mortgage-borrowers-during-covid-19-pandemic_report_2021-05.pdf.
---------------------------------------------------------------------------

3.4 Interagency Engagement

    Seeking to address current and emerging fair lending risks, the 
CFPB regularly coordinates with other Federal, State, tribal, county, 
municipal, and international government entities, policymakers, and the 
organizations that represent them. Through numerous interagency 
organizations and taskforces, the CFPB coordinated its 2021 fair 
lending regulatory, supervisory, and enforcement activities to promote 
consistent, efficient, and effective enforcement of Federal fair 
lending laws.
    The CFPB, along with the Federal Trade Commission (FTC), HUD, FDIC, 
FRB, NCUA, OCC, DOJ, and FHFA, constitute the Interagency Task Force on 
Fair Lending. This Task Force meets regularly to discuss fair lending 
enforcement efforts, share current methods of conducting supervisory 
and enforcement fair lending activities, and coordinate fair lending 
policies. The FDIC is currently the Chair of this Task Force.
    Through the FFIEC the CFPB has robust engagements with other 
partner agencies that focus on fair lending issues. For example, 
throughout the reporting period, the CFPB has chaired the HMDA/
Community Reinvestment Act (CRA) Data Collection Subcommittee, a 
subcommittee of the FFIEC Task Force on Consumer Compliance. This 
subcommittee oversees FFIEC projects and programs involving HMDA data 
collection and dissemination, the preparation of the annual FFIEC 
budget for processing services, and the development and implementation 
of other related HMDA processing projects as directed by this Task 
Force.
    The CFPB also participates in the Interagency Working Group on Fair 
Lending Enforcement, a standing working group of Federal agencies--with 
the DOJ, HUD, and FTC--that meets regularly to discuss issues relating 
to fair lending enforcement. The agencies use these meetings to also 
discuss fair lending developments and trends, methodologies for 
evaluating fair lending risks and violations, and coordination of fair 
lending enforcement efforts.
    The CFPB is also a member of the FFIEC's Appraisal Subcommittee 
(ASC) that provides Federal oversight of State appraiser and appraisal 
management company regulatory programs, and a monitoring framework for 
The Appraisal Foundation and the Federal Financial Institutions 
Regulatory Agencies in their roles to protect Federal financial and 
public policy interests in real estate appraisals utilized in federally 
related transactions.\72\ The ASC responsibilities include promoting 
fairness and equity in valuations.\73\
---------------------------------------------------------------------------

    \72\ During the reporting period, the Bureau served as vice 
chair of the ASC.
    \73\ The Appraisal Subcommittee includes the FFIEC agencies, 
HUD, and the FHFA.
---------------------------------------------------------------------------

    The CFPB engaged with other agencies on issues of bias in home 
appraisals through the Property Appraisal and Valuation Equity (PAVE) 
Taskforce.\74\ The PAVE Task Force is chaired by HUD Secretary Marcia 
Fudge and Assistant to the President for Domestic Policy and Director 
of the Domestic Policy Council, Ambassador Susan Rice. This Task Force 
also includes cabinet-level leaders from executive departments and 
additional members from independent agencies, including the CFPB.
---------------------------------------------------------------------------

    \74\ Additional activity has occurred regarding this issue since 
the end of this reporting period: On March 23, 2022, the PAVE 
taskforce released its final report. The report is available at: 
https://pave.hud.gov/sites/pave.hud.gov/files/documents/PAVEActionPlan.pdf.
---------------------------------------------------------------------------

    In addition to these established interagency organizations, CFPB 
personnel meet regularly with agency personnel, including with DOJ, 
HUD, FTC, FHFA, State Attorneys General, and the prudential regulators 
to coordinate and discuss the CFPB's fair lending work.

4. Amicus Program and Other Litigation

    The CFPB files amicus, or ``friend-of-the-court,'' briefs in 
significant court cases concerning Federal consumer financial 
protection laws, including cases involving ECOA. These briefs provide 
courts with the CFPB's views and help ensure that consumer financial 
protection statutes are correctly and consistently interpreted.
    In 2021, the CFPB and the DOJ, FRB, and FTC filed an amicus brief 
in Fralish v. Bank of America, a case in which an individual consumer 
sued his bank for closing his credit card account without providing an 
explanation mandated by ECOA. In its defense, Bank of America argued 
that ECOA only applies when people are applying for credit. The CFPB's 
jointly filed brief explains that Bank of America's argument is wrong, 
contradicted by the language and history of the law. ECOA's crucial 
protections against credit discrimination do not disappear the moment 
that credit is extended. Instead, ECOA shields existing borrowers from 
discrimination in all aspects of a credit arrangement and gives 
consumers the right to an explanation when their application for credit 
is denied, or when an existing account is terminated, or its terms are 
unfavorably changed. These ``adverse action notices'' discourage 
discrimination and help educate consumers about the reasons for a 
creditor's decision. Like ECOA's core ban on discrimination, this 
requirement applies to current borrowers as well as those seeking 
credit. Information regarding the CFPB's amicus program, including a 
description of previously filed amicus briefs, is available on the 
CFPB's website, at www.consumerfinance.gov/policy-compliance/amicus/.
    In August 2020, the CFPB was sued in the U.S. District Court for 
the District of Columbia by the National Community Reinvestment 
Coalition, et al., over the CFPB's final rule amending Regulation C to 
raise the loan-volume coverage thresholds for financial institutions 
reporting data under HMDA (the 2020 HMDA rule). The Plaintiffs argue 
that the 2020 HMDA rule violates the Administrative Procedure Act. This 
litigation is ongoing.
    In 2019, the CFPB was sued in the U.S. District Court for the 
Northern District of California by the California Reinvestment 
Coalition, et al., regarding the CFPB's obligation to issue rules 
implementing section 1071. In February 2020, the court approved a 
stipulated settlement agreement. Among other things, the settlement 
agreement also provides a process for setting appropriate deadlines for 
the issuance of a proposed and final rule implementing section 1071. 
The CFPB has made significant progress with this rulemaking, including 
timely issuing a notice of proposed rulemaking. For a comprehensive 
update on 1071 activity, see section 2.1.1 of this report.

5. Interagency Reporting on ECOA and HMDA

    The CFPB is statutorily required to file a report to Congress 
annually describing the administration of its functions under ECOA, 
summarizing public enforcement actions taken by other agencies with 
administrative enforcement responsibilities under ECOA, and providing 
an assessment of the extent to which compliance with ECOA has been 
achieved.\75\ In addition, the CFPB's annual HMDA reporting requirement 
calls for the CFPB, in consultation with HUD, to report annually on the 
utility of HMDA's

[[Page 29128]]

requirement that covered lenders itemize certain mortgage loan 
data.\76\
---------------------------------------------------------------------------

    \75\ 15 U.S.C. 1691f.
    \76\ 12 U.S.C. 2807.
---------------------------------------------------------------------------

5.1 Reporting on ECOA Enforcement

    The enforcement and compliance efforts and assessments made by the 
eleven agencies assigned enforcement authority under section 704 of 
ECOA are discussed in this section, as reported by the agencies.
---------------------------------------------------------------------------

    \77\ Collectively, the Board of Governors of the Federal Reserve 
System (FRB), the Federal Deposit Insurance Corporation (FDIC), the 
National Credit Union Administration (NCUA), the Office of the 
Comptroller of the Currency (OCC), and the Bureau of Consumer 
Financial Protection (Bureau) comprise the Federal Financial 
Institutions Examination Council (FFIEC). The State Liaison 
Committee was added to FFIEC in 2006 as a voting member. Federal 
Financial Institutions Examination Council, http://www.ffiec.gov 
(last visited Mar. 30, 2021).
    \78\ The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) was eliminated as a stand-alone agency within USDA in 2017. 
The functions previously performed by GIPSA have been incorporated 
into the Agricultural Marketing Service (AMS), and ECOA reporting 
comes from the Packers and Stockyards Division, Fair Trade Practices 
Program, AMS.
    \79\ 15 U.S.C. 1691c.
---------------------------------------------------------------------------

BILLING CODE 4810-AM-P
[GRAPHIC] [TIFF OMITTED] TN12MY22.000


[[Page 29129]]


BILLING CODE 4810-AM-C
5.1.1 Public Enforcement Actions
    In 2021, of the Federal agencies with ECOA enforcement authority, 
only the CFPB, together with DOJ, brought public enforcement actions 
for violations of ECOA.
    In October of 2021, the CFPB, together with DOJ, brought a public 
enforcement action in Federal district court in the Western District of 
Tennessee against Trustmark, headquartered in Jackson, Mississippi. The 
joint complaint alleged that Trustmark engaged in unlawful 
discrimination against applicants and prospective applicants, including 
by redlining majority Black and Hispanic communities, and engaged in 
acts and practices directed at prospective applicants that would 
discourage prospective applicants from applying for credit in violation 
of ECOA and Regulation B.\80\
---------------------------------------------------------------------------

    \80\ At the same time, pursuant to the FHA, the OCC issued a 
consent order with Trustmark, which imposed a $4 million civil money 
penalty for failing to provide equal access to residents seeking 
mortgage loans in majority minority census tracts and high minority 
census tracts in the Memphis MSA during the period 2014-2016.
---------------------------------------------------------------------------

    Additionally, on September 8, 2021, the CFPB brought a public 
enforcement action in Northern District of California against LendUp 
Loans, LLC. In addition to other violations of consumer protection 
laws, the CFPB alleged that LendUp failed to timely issue required 
adverse-action notices and failed to provide accurate denial reasons on 
its adverse-action notices to thousands of loan applicants, in 
violation of ECOA and Regulation B.
    Both the Trustmark and LendUp actions are described further in 
section 1.2.1 of this report.
5.1.2 Number of Institutions Cited for ECOA/Reg B Violations
    In 2021, the FFIEC agencies reported citing 198 institutions with 
violations of ECOA and/or Regulation B.
5.1.3 Violations Cited During ECOA Examinations
    Among institutions examined for compliance with ECOA and Regulation 
B, the FFIEC agencies reported that the most frequently cited 
violations were as follows:
     
---------------------------------------------------------------------------

    \81\ 12 CFR 1002.4(a).
    \82\ 12 CFR 1002.7 (d)(1).
    \83\ 12 CFR 1002.7 (d)(1).
    \84\ 12 CFR 1002.4(a).
    \85\ 12 CFR 1002.5(b)-(d).
    \86\ 12 CFR 1002.5(b).
    \87\ 12CFR 1002.6(b)(8).
    \88\ 12 CFR 1002.6(b)(9).
    \89\ 12 CFR 1002.9(a)(2); 1002.9(b)(2).
    \90\ 12 CFR 1002.9(a)(2); 1002.9(b)(2); 1002.9(c).
    \91\ 12 CFR 1002.9(a)(1)(i); 1002.9(b)(1); 1002.9(b)(2).
    \92\ 12 CFR 1002.9(a)(1)(i); (a)(2).
    \93\ 12 CFR 1002.9(a)(1);1002.9(b).

                         Table 3--Regulation B Violations Cited by FFIEC Agencies, 2021
----------------------------------------------------------------------------------------------------------------
       Regulation B violations: 2021                              FFIEC agencies reporting
----------------------------------------------------------------------------------------------------------------
12 CFR 1002.4(a), 1002.7(d)(1):             NCUA,\81\ FRB,\82\ OCC,\83\ CFPB.\84\
 Discrimination.
Discrimination on a prohibited basis in a
 credit transaction; improperly requiring
 the signature of the applicant's spouse
 or other person..
12 CFR 1002.5(b), 12 CFR 1002.5(c), 12 CFR  FDIC,\85\ CFPB.\86\
 1002.5(d): Inquiring about protected
 class.
Inquiring about the race, color, religion,
 national origin, or sex of an applicant
 or any other person in connection with a
 credit transaction, except as permitted
 in Sec.  Sec.   1002.5(b)(1) and (b)(2),
 or 1002.8 in the case of a special
 purpose credit program; requesting any
 information concerning an applicant's
 spouse or former spouse, except as
 permitted in Sec.   1002.5(c)(2);
 requesting the marital status of a person
 applying for individual, unsecured
 credit, except as permitted in Sec.
 1002.5(d)(1) (for credit other than
 individual, unsecured, a creditor may
 inquire about the applicant's marital
 status, but must only use the terms
 ``married,'' ``unmarried,'' and
 ``separated''); inquiring as to whether
 income stated in an application is
 derived from alimony, child support, or
 separate maintenance payments, except as
 permitted in Sec.   1002.5(d)(2); or
 requesting information about birth
 control practices, intentions concerning
 the bearing or rearing of children, or
 capability to bear children, except as
 permitted in Sec.   1002.5(d)(3)..
12 CFR 1002.6(b)(8), (b)(9): Specific       NCUA,\87\ CFPB.\88\
 rules concerning use of information.
Failure to evaluate married and unmarried
 applicants by the same standards; in
 evaluating joint applicants, a creditor
 shall not treat applicants differently
 based on the existence, absence, or
 likelihood of a marital relationship
 between the parties; a creditor shall not
 consider race, color, religion, national
 origin, sex (or an applicant's or other
 person's decision not to provide the
 information) in any aspect of a credit
 transaction..
12 CFR 1002.9(a)(1)(i), (a)(2), (b)(1);     FDIC,\89\ NCUA,\90\ OCC,\91\ FRB,\92\ CFPB.\93\
 (b)(2); (c): Adverse Action.
Failure to provide notice to the applicant
 30 days after receiving a completed
 application concerning the creditor's
 approval of, counteroffer to, or adverse
 action on the application; failure to
 provide appropriate notice to the
 applicant 30 days after taking adverse
 action on an incomplete application;
 failure to provide sufficient information
 in an adverse action notification,
 including the specific reasons for the
 action taken..
12 CFR 1002.13(a)(1): Information for       CFPB.
 Monitoring Purposes.
Failure to request as part of an
 application for credit for purchase or
 refinancing of a dwelling occupied or to
 be occupied by the applicant as a
 principal residence, where the extension
 of credit will be secured by the dwelling
 the following information regarding the
 applicant(s): Ethnicity and race; sex;
 marital status; and age..
12 CFR 1002.14 (a)(1), (a)(2), (a)(3),      OCC,\94\ FDIC.\95\
 (a)(4): Appraisals and Valuations.
Failure to provide appraisals and other
 valuations..
----------------------------------------------------------------------------------------------------------------

    Among institutions examined for compliance with ECOA and Regulation 
B, the Non-FFIEC agencies reported that the most frequently cited 
violations were as follows:

[[Page 29130]]



                Table 4--Regulation B Violations Cited by Non-FFIEC Agencies Enforcing ECOA, 2021
----------------------------------------------------------------------------------------------------------------
       Regulation B violations: 2021                            Non-FFIEC agencies reporting
----------------------------------------------------------------------------------------------------------------
12 CFR 1002.9(a)(1)(i): Adverse Action....  FCA.
Failure to provide notice to the applicant
 30 days after receiving a completed
 application concerning the creditor's
 approval of, counteroffer or adverse
 action on the application; failure to
 provide sufficient information in an
 adverse action notification, including
 the specific reasons for the action
 taken; failure to provide ECOA notice..
12 CFR 1002.13: Information for monitoring  FCA.
 purposes.
Failure to obtain information for
 monitoring purposes..
----------------------------------------------------------------------------------------------------------------

    The AMS and the SBA reported that they received no complaints based 
on ECOA or Regulation B in 2021. The SEC had nothing to report. The FTC 
is an enforcement agency and does not conduct compliance examinations.
---------------------------------------------------------------------------

    \94\ 12 CFR 1002.14(a)(1); 1002.14(a)(2).
    \95\ 12 CFR 1002.14(a)(1-4).
---------------------------------------------------------------------------

5.1.4 Referrals to the Department of Justice
    The agencies assigned enforcement authority under section 704 of 
ECOA must refer a matter to DOJ when there is reason to believe that a 
creditor has engaged in a pattern or practice of lending discrimination 
in violation of ECOA.\96\ They also may refer other potential ECOA 
violations to DOJ.\97\ In 2021, 3 agencies (FDIC, NCUA, and CFPB) made 
6 such referrals to DOJ involving discrimination in violation of ECOA. 
A brief description of those matters follows.
---------------------------------------------------------------------------

    \96\ 15 U.S.C. 1691e(g).
    \97\ Id.
---------------------------------------------------------------------------

    In 2021, the FDIC referred two fair lending matters to DOJ. The 
first matter involved illegal credit discrimination in the underwriting 
of private student loans on the prohibited basis of the applicant's 
race. The second matter involved illegal credit discrimination on the 
prohibited basis of race by redlining majority Black communities in the 
origination of residential mortgage loans.
    NCUA referred two ECOA matters to DOJ, both involving 
discrimination on the basis of age. DOJ declined to open an independent 
investigation and deferred to NCUA for administrative enforcement on 
both referrals.
    As reported in section 1.2.2 above, in 2021, the CFPB referred two 
matters to DOJ. The referrals involved discrimination in mortgage 
origination policies and mortgage origination pricing based on race and 
national origin.

5.2 Reporting on HMDA

    The CFPB's annual HMDA reporting requirement calls for the CFPB, in 
consultation with HUD, to report annually on the utility of HMDA's 
requirement that covered lenders itemize loan data in order to disclose 
the number and dollar amount of certain mortgage loans and 
applications, grouped according to various characteristics.\98\ The 
CFPB, in consultation with HUD, finds that itemization and tabulation 
of these data furthers the purposes of HMDA.
---------------------------------------------------------------------------

    \98\ 12 U.S.C. 2807.
---------------------------------------------------------------------------

6. Conclusion

    Throughout 2021, the CFPB worked to ensure that individuals and 
communities had fair, equitable, and nondiscriminatory access to 
credit, in accordance with its Congressional mandate through 
supervision and enforcement actions, research and market monitoring 
activities, rulemaking and guidance, amicus activity, and consumer 
education.
    The CFPB is looking ahead to the future of financial services 
markets, which will be increasingly shaped by predictive analytics, 
algorithms, and machine learning. While technology holds great promise, 
it can also reinforce historical biases that have excluded too many 
Americans from opportunities.
    In particular, the CFPB will be sharpening its focus on digital 
redlining and algorithmic bias. As more technology platforms, including 
Big Tech firms, influence the financial services marketplace, the CFPB 
will be working to identify emerging risks and to develop appropriate 
policy responses.
    The CFPB is committed to protecting individuals, small businesses, 
and communities from discrimination, holding institutional and 
individual bad actors accountable, and ensuring robust and 
comprehensive ameliorative remedies for violations of the laws under 
our jurisdiction.

                                            Appendix A--Defined Terms
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
AAPI..........................................................  Asian American and Pacific Islanders.
AMS...........................................................  Agricultural Marketing Service of the U.S.
                                                                 Department of Agriculture.
AI............................................................  Artificial Intelligence.
ASC...........................................................  FFIEC's Appraisal Subcommittee.
AVM...........................................................  Automated Valuation Models.
CARES Act.....................................................  Coronavirus Aid, Relief, and Economic Security
                                                                 Act.
CFPA..........................................................  Consumer Financial Protection Act of 2010.
CFPB..........................................................  Consumer Financial Protection Bureau.
CMS...........................................................  Compliance Management System.
COVID-19......................................................  Coronavirus Disease/Pandemic 2019.
CRA...........................................................  Community Reinvestment Act.
Dodd-Frank Act................................................  Dodd-Frank Wall Street Reform and Consumer
                                                                 Protection Act.
DOJ...........................................................  U.S. Department of Justice.
DOT...........................................................  U.S. Department of Transportation.
ECOA..........................................................  Equal Credit Opportunity Act.
EFTA..........................................................  Electronic Fund Transfer Act.
FCA...........................................................  Farm Credit Administration.
FDIC..........................................................  Federal Deposit Insurance Corporation.
FHA...........................................................  Fair Housing Act.
FHFA..........................................................  Federal Housing Finance Agency.

[[Page 29131]]

 
Federal Reserve Board or FRB..................................  Board of Governors of the Federal Reserve
                                                                 System.
FFIEC.........................................................  Federal Financial Institutions Examination
                                                                 Council--the FFIEC member agencies are the
                                                                 Board of Governors of the Federal Reserve
                                                                 System (FRB), the Federal Deposit Insurance
                                                                 Corporation (FDIC), the National Credit Union
                                                                 Administration (NCUA), the Office of the
                                                                 Comptroller of the Currency (OCC), and the
                                                                 Consumer Financial Protection Bureau (CFPB).
                                                                 The State Liaison Committee was added to FFIEC
                                                                 in 2006 as a voting member.
FIRREA........................................................  Financial Institutions Reform, Recovery, and
                                                                 Enforcement Act of 1989.
FTC...........................................................  Federal Trade Commission.
GIPSA.........................................................  Grain Inspection, Packers and Stockyards
                                                                 Administration of the U.S. Department of
                                                                 Agriculture.
HMDA..........................................................  Home Mortgage Disclosure Act.
HoPI..........................................................  Hawaiian or Pacific Islander.
HUD...........................................................  U.S. Department of Housing and Urban
                                                                 Development.
LEP...........................................................  Limited English Proficient.
MH............................................................  Manufactured Home.
MSA...........................................................  Metropolitan Statistical Area.
NCUA..........................................................  National Credit Union Administration.
NPRM..........................................................  Notice of Proposed Rulemaking.
OCC...........................................................  Office of the Comptroller of the Currency.
PAVE..........................................................  Property Appraisal and Valuation Equity.
PPP...........................................................  Paycheck Protection Program (CARES Act).
RFI...........................................................  Request for Information.
SBA...........................................................  Small Business Administration.
SBREFA........................................................  Small Business Regulatory Enforcement Fairness
                                                                 Act of 1996.
SEC...........................................................  Securities and Exchange Commission.
UDAAP.........................................................  Unfair, Deceptive, or Abusive Acts or Practices.
USDA..........................................................  U.S. Department of Agriculture.
----------------------------------------------------------------------------------------------------------------

Signing Authority

    The Director of the Bureau, Rohit Chopra, having reviewed and 
approved this document, is delegating the authority to electronically 
sign this document to Laura Galban, a Bureau Federal Register Liaison, 
for purposes of publication in the Federal Register.

Laura Galban,
Federal Register Liaison, Consumer Financial Protection Bureau.
[FR Doc. 2022-10133 Filed 5-11-22; 8:45 am]
BILLING CODE 4810-AM-P


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