FTC Staff Provides Annual Letter to CFPB On 2020 Equal Credit Opportunity Act Activities

The staff of the Federal Trade Commission has provided the Consumer Financial Protection Bureau (CFPB) an annual summary of its activities enforcing the Equal Credit Opportunity Act (ECOA).

The FTC is responsible for ECOA enforcement and education regarding most non-bank financial service providers. In its summary, FTC staff describes the Commission’s work on ECOA-related issues, including activities addressed in enforcement, research, and policy development such as:

• an enforcement action in federal court against New York City car dealer Bronx Honda and its general manager, alleging that defendants violated ECOA and Regulation B by discriminating against African-American and Hispanic consumers who financed vehicle purchases, including charging them higher markups and fees for financing than similarly situated non-Hispanic white consumers; the defendants agreed to pay $1.5 million and establish a fair lending program to settle the charges, among other things;
• an amici curiae brief jointly filed with the CFPB with the U.S. Court of Appeals for the Second Circuit in Tewinkle v. Capital One, N.A., an action by a consumer alleging discrimination under ECOA, addressing whether a person ceases to be an applicant under ECOA and Regulation B after receiving (or being denied) an extension of credit;
• a comment in response to the CFPB’s request for information about Regulation B addressing the FTC’s work in disparate-impact analysis and small-business lending;
• the 13th Annual FTC Microeconomics Conference, which included a paper session and discussion on “Un”Fair Machine Learning Algorithms; among the issues addressed were that firms and institutions increasingly use machine-learning algorithms in making decisions in areas with far reaching effects, including access to credit;
• the continued work of the agency’s Military Task Force, and FTC initiatives to assist military consumers;
• the FTC’s participation as a member of the Interagency Task Force on Fair Lending, a joint undertaking with the CFPB, the Department of Justice, the Department of Housing and Urban Development, and the federal banking agencies, which shares information and discusses policy issues; and
• the FTC’s participation as a member of the newly formed Interagency Fair Lending Methodologies Working Group, with the CFPB, the Federal Housing Finance Agency, DOJ, HUD, and the federal banking agencies, to coordinate and share information on analytical methodologies used in enforcement of and supervision for compliance with fair lending laws, including ECOA.

The summary also outlines the Commission’s business and consumer education efforts on fair lending issues.