In March 2022, the CFPB announced what a TroutmanPepper blog called “an enormous change to its fair lending philosophy that will have major ramifications for financial services providers of all types.” To meet this new enforcement authority, the CFPB updated its UDAAP Exam Manual.
As the Troutman blog noted, “[w]hile this announcement will likely surprise the financial services industry, the idea that discrimination could be enforced under UDAAP authority has been simmering for a couple of years now.” The blog authors added that the Bureau’s announcement may have limited legal merit, but “the Bureau signaled that it intends to apply this position in supervision and enforcement matters, and the implications of this position for the financial services industry cannot be overstated.”
A BallardSpahr blog also helps readers better understand the new CFPB procedures and echo the concern that the Bureau lacks legal authority for its new processes.
Eric J. Ellman is Senior Vice President for Public Policy and Legal Affairs at the Consumer Data Industry Association (CDIA) in Washington, DC. He also served for eight months as Interim President and CEO of the Association. More