On April 14, the Consumer Financial Protection Bureau (CFPB) issued its fifth fair lending report to Congress, which discusses the Bureau’s work in this area in 2016 and its plans for 2017. Before proceeding further, I should note that the CFPB, a creature of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is under siege by congressional Republicans.
For 2017, the CFPB intends to: (1) evaluate whether lenders have “intentionally discouraged” potential applicants in minority neighborhoods from applying for credit; (2) investigate whether mortgage or student loan borrowers who fall behind on payments face more difficulty in working out new payment plans because of their race, ethnicity, age, or gender; and (3) further explore fair access to credit for woman- and minority-owned firms. The Bureau lumps its characterization of these initiatives as presenting “substantial risk of credit discrimination for consumers.”
There is opportunity here on both sides of credit transactions: (1) representing consumers who allege discrimination, and (2) representing lenders defending against such allegations.
On a related note, the U.S. Department of Education appears to be engaging in a debt forgiveness slowdown. Translated, that means that student loan recipients defrauded by for-profit colleges (other than Trump University, where a settlement with thousands of members of a plaintiff class was recently approved) might have to wait longer to see that debt forgiven by the Education Department. Tens of thousands of student borrowers seeking to have their federal loans canceled on the grounds their colleges defrauded them now must wait to see if their loans will be forgiven under the Borrower Defense to Repayment program.