CFPB Stresses Importance of Fair Lending for Minority and Women-Owned Businesses

John Zasada, Compliance Consulting Director, Financial
Institutions Group

On April 27, 2020, the Consumer Financial Protection Bureau (CFPB) released a blog about fair lending to minority and women-owned businesses. The blog explains the purpose of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Small Business Administration’s Paycheck Protection Program (PPP). The CFPB states they are working with the Small Business Administration (SBA) in order to provide loans to minority, women-owned and small businesses. The CFPB stresses these business owners are protected by the Equal Credit Opportunity Act so they are not discriminated against because of race, color, national origin, sex and other protected characteristics. Included in the blog are the following warning signs of discrimination:

• Refusal of available loan or workout option even though you qualify for it based on advertised requirements
• Offers of credit or workout options with a higher rate or worse terms than the one you applied for, even though you qualify for the lower rate
• Discouragement from applying for credit by the lender because of a protected characteristic
• Denial of credit, but are not given a reason why or told how to find out why
• Negative comments about race, national origin, sex or other protected statutes

Small business owners who think they were discriminated against are encouraged to submit a lending discrimination complaint online.