WASHINGTON-The new Consumer Financial Protection Bureau put banks, credit unions and other lenders on notice last week that it is stepping up enforcement of anti-discrimination laws.
The new consumer watchdog said it is equipping consumers with the information they need to spot the warning signs of discrimination, especially against minorities and women.
"Our economy is in the process of recovering from the worst financial crisis since the Great Depression," CFPB Director Richard Cordray said during a speech to the National Community Reinvestment Coalition, which focuses on lending discrimination. "We cannot afford to tolerate practices that either price out or cut off segments of the population-such as women, the elderly or communities of color-from the credit markets."
The new agency, which was created as part of the 2010 Dodd-Frank Act, has assumed enforcement authority for such consumer laws as the Equal Credit Opportunity Act, the Fair Housing Act and other consumer laws the Federal Reserve used to enforce. The new agency has examination powers over just the three biggest credit unions, but has power to enforce consumer laws over all credit unions.
"We want consumers to avoid the marketplace's silent pickpocket-discrimination," said Cordray. "That's why the CFPB is educating consumers about their fair lending rights and pursuing lenders whose practices are discriminatory."
Banks and nonbanks under Bureau supervision will be monitored for potential fair lending violations including practices with unlawful discriminatory effects, said Cordray. The bureau's new Compliance Bulletin will apply to all institutions under the Bureau's jurisdiction and applies to credit products including mortgages, credit cards, student loans and auto loans.
