We use cookies to improve your experience and optimize user-friendliness. Read our privacy policy for more information on the cookies we use and how to delete or block them. To continue browsing our site, please click accept.
VIEWpoint Issue 1 | 2023
2023 Compliance Trends: Staying Ahead in an Evolving Regulatory E...
2023 Tax Calendar
On March 16, 2022, the Consumer Financial Protection Bureau (CFPB) announced the application of Unfair, Abusive, or Deceptive Acts of Practices (UDAAP) to unfair discrimination practices, including situations where fair lending laws do not apply.
The CFPB is expanding anti-discrimination efforts to combat illegal discrimination in any form in financial institutions. The Equal Credit Opportunity Act (ECOA) and the Fair Housing Act have traditionally been used to cover fair lending, which, of course, covers loans. Their exam manual has been updated for evaluating UDAAP, and for example, denying access to a checking account because the individual is of a particular race could be an unfair practice even if the ECOA does not apply. Consequently, the CFPB indicated they will examine for discrimination in all consumer finance markets, including credit, servicing, collections, consumer reporting, payments, remittances and deposits.
On March 16, 2022, the CFPB also issued a blog post about the change and spoke about the work the CFPB will undertake to focus on the widespread and growing reliance on machine learning models throughout the financial industry and their potential for perpetuating biased outcomes. It will be closely examining companies’ reliance on automated decision-making models and any potential discriminatory outcomes.
Need assistance with UDAAP compliance? Contact our regulatory compliance specialists today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
A quick registration is required to view our resources.
You will only be asked to do this one time (unless you don't save your browser cookies).