The Consumer Financial Protection Bureau yesterday issued a warning toward companies in the financial service industry, including those in the debt collections market, to make sure they are not engaging in any activities that could be found to be discriminatory, including in areas where fair lending laws may not apply. Instead, the CFPB said it would use its powers under the Consumer Financial Protection Act’s Unfair, Deceptive, and Abusive Acts or Practices (UDAAP), to protect consumers.
To make sure that it is doing all it can to identify instances where individuals might be discriminated against, the CFPB updated its supervisory operations to make sure those who are investigated and examining institutions are on the looking for such activities.
“We will be expanding our anti-discrimination efforts to combat discriminatory practices across the board in consumer finance,” said Rohit Chopra, the Director of the CFPB, in a statement.
The CFPB said it would be looking for discrimination in all markets, including “credit, servicing, collections, consumer reporting, payments, remittances, and deposits.”
Under the updated supervisory guidelines, instances of discrimination may now fall under the “unfairness” prong of UDAAP. For something to be characterized as discrimination does not necessarily mean that it was done intentionally, the CFPB noted. Such occurrences may include situations where consumers are harmed in a way that they could not reasonably avoid.
Among the requirements that the CFPB will be looking for are whether “The entity has a process to prevent discrimination in relation to all aspects of consumer financial products or services the entity offers or provides, which includes the evaluation of all policies, procedures and processes for discrimination prior to implementation or making changes, and continued monitoring for discrimination after implementation.”
