Disparate Impact (Still) a Fair Lending Risk

Since the Consumer Financial Protection Bureau’s 2013 indirect automobile guidance was repealed last year, there have been no new public indirect automobile fair lending cases alleging disparate impact. However, fair lending risk still exists. The Equal Credit Opportunity Act and Regulation B remain. So, too, does the CFPB’s 2012 fair lending guidance endorsing disparate impact. […]
  • Brian Fink
  • April 8, 2019
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Is Disparate Impact Dead?

Don’t write off disparate impact just yet. Sorry to say it, but that’s where I am on the issue. After the then Consumer Financial Protection Bureau (now Bureau of Consumer Financial Protection) announced in December 2016 that it would be turning its attention from disparate impact claims in auto finance, the auto-world rejoiced. The joy […]
  • Michael Benoit
  • October 31, 2018
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Zest is Using Math to Comply with CFPB Disparate Impact

When you think about the greatest invention of the 20th century, a few key technologies might come to mind: the personal computer, internet, antibiotics, or the electric guitar. But, for Douglas Merrill, founder and chief executive of Zest Finance, nothing compares to the Fico score. “The Fico score is the most important innovation of the […]
  • William Hoffman
  • March 9, 2017
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Like a Dog with a Bone: Is it Time for the CFPB to Drop Disparate Impact?

On Jan. 18, the Republican staff of the House Committee on Financial Services issued Unsafe at Any Bureaucracy, Part III: The CFPB’s Vitiated Legal Case Against Auto-Lenders. This was the third in a series of reports addressing the Consumer Financial Protection Bureau’s attempts to hold auto finance companies responsible for racial and ethnic disparities in […]
  • Michael Benoit
  • February 16, 2017
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The CFPB’s Regulation of the Auto Finance Industry is Legally and Ethically Wrong [OPINION]

As the Chair of my firm’s Auto Finance Team, a multidisciplinary team of attorneys serving the auto finance industry, I’ve heard my share of complaints about the CFPB’s newfound focus on auto finance companies, banks, and non-bank entities that serve the auto finance sector. In the course of my discussions with clients, colleagues, industry representatives, […]
  • Blair Evans
  • December 21, 2016
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Rate Increases Unlikely to Hurt Auto Loans, Short Term

Higher interest rates are unlikely to hurt auto lenders much in the short term, for a couple of reasons, lenders said. First, rate increases look to be gradual once the Federal Reserve starts to normalize monetary policy, possibly later this year. “The consumer is not even going to notice it,” said Paul Kirkbride, senior vice […]
  • George Yacik
  • May 28, 2015
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Uniformity and Speed, Top Subprime Priorities

Whether subprime auto lending is reaching dangerous levels is debatable, as evidenced by the continued conversation in the media surrounding the space. One seemingly undeniable fact, though, is that subprime lending is on rise. As such, lenders looking to grow their subprime portfolio should keep decision processes automated, uniform, and speedy to help win business […]
  • Larissa Padden
  • October 31, 2014
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Lenders Struggle with CFPB Auto Dealer Edicts

Lenders are being required to act as a “policeman” over the actions of their dealer clients—who are not regulated by the CFPB—and risk alienating those relationships even if the dealers haven’t violated any fair lending laws.
  • George Yacik
  • April 9, 2014
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