CFPB Releases 2020 Fair Lending Report


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The CFPB recently released its 2020 Fair Lending Report.  The report highlights the CFPB’s work in 2020 around fair lending during the COVID-19 pandemic and its resulting economic consequences.

As part of its risk-based prioritization process for 2020, the CFPB focused its fair lending supervision efforts on mortgage origination, small business lending, and student loan origination.  As in previous years, the CFPB’s mortgage origination work continued to focus on redlining, assessing discriminatory practices in the underwriting and pricing processes, and HMDA data integrity and validation reviews.

The report highlighted two public fair lending enforcement actions.  The first action involved allegations of illegal redlining that discouraged prospective applicants living or seeking credit in certain African American neighborhoods.  Litigation in this matter is ongoing.  In the second action, the CFPB settled with a company to resolve allegations of inaccurate HMDA data about mortgage transactions for 2016 and 2017.  The report also noted other pending enforcement actions, including those involving potential discrimination in several markets, including student lending, payday lending, credit cards, and mortgage lending.

The report described the work the CFPB has done in connection with Section 1071 of the Dodd-Frank Act, which requires financial institutions to compile, maintain, and submit data for credit for women-owned, minority-owned, and small businesses.  The CFPB has collected comments and recommendations from representatives of small entities that it will consider when drafting implementing regulations.

In 2021, the CFPB expects to focus on fair lending and efforts to address racial equity for underserved communities that will be covered in the report released in 2022.