CFPB expands anti-discrimination enforcement

On Wednesday, the Consumer Finance Protection Bureau (CFPB) announced that discrimination associated with any financial product is illegal. Historically, the Bureau has primarily concerned itself with discrimination in credit.

Why should we care?
“The CFPB’s announcement is a sea change in how financial institutions need to think about fair lending and fair treatment,” said Christopher Willis, a partner at Troutman Pepper. The enforcement shift—which hopes to counter systemic financial exclusion and discrimination—will require greater social and anti-discriminatory compliance for financial institutions across sectors, not just credit. Payments, prepaid cards, deposit and checking accounts, debt collection, and remittances now fall under the CFPB’s revised purview. The move is part of a larger regulatory pivot under CFPB head Rohit Chopra. Chopra has led the Bureau as it’s quietly rolled out new enforcement routes through administrative courts and also begun investigating machine learning in credit decisions. Fintechs outside credit should expect greater engagement with the CFPB, as well as swifter responses to new financial instruments.