AFSA, in collaboration with the Bank Policy Institute (BPI) and America’s Credit Unions (ACU), has filed an amicus brief concerning recent changes made by the Consumer Financial Protection Bureau (CFPB) to its Supervision and Examination Manual. The brief argues that these changes exceed the CFPB's authority by extending its scope beyond addressing intentional discrimination.
In March 2022, the CFPB amended the UDAAP chapter of its manual to include considerations of unfairness linked to discriminatory conduct. By September 2022, this amendment prompted a lawsuit from the U.S. Chamber of Commerce and others, claiming that it "exceeds the CFPB’s statutory authority by adding discrimination to [the Bureau’s] UDAAP authority." Additionally, they argued that the Bureau bypassed necessary procedures under the Administrative Procedures Act.
The amicus brief highlights concerns about how these changes impact financial institutions across America. Members of AFSA, BPI, and ACU have committed resources to developing anti-discrimination policies and compliance systems aimed at preventing unlawful discrimination within their operations. These efforts underscore a shared belief among members that discrimination undermines the integrity of the financial system.
The CFPB's new rule asserts that disparate impact alone could be considered discriminatory conduct under the Dodd-Frank Act's prohibition on "unfair, deceptive, or abusive acts or practices" (UDAAP). However, there is criticism over a lack of guidance from CFPB on compliance with this update and acknowledgment of challenges related to monitoring disparate-impact liability.
This change has led companies to incur significant costs as they adjust their anti-discrimination monitoring practices beyond lending contexts. Despite requests for clarification from CFPB regarding expectations and support for combating discrimination effectively, no response has been provided so far.