On May 9, 2022, the CFPB announced it issued an advisory opinion stating that in its opinion, the Equal Credit Opportunity Act (ECOA) applies to every aspect of dealing with a creditor, not just to the credit application process. The advisory opinion indicates ECOA protections apply to revocation, collection procedures, alteration or termination of credit, and anything else that takes place after credit has been extended.
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On April 7, the Consumer Finance Protection Bureau (CFPB or Bureau) filed an amicus brief in an appeal, pending before the Court of Appeals for the Eleventh Circuit in which the Bureau argued that the Fair Credit Reporting Act (FCRA) does not exempt furnishers from investigating disputes based on legal questions as opposed to factual inaccuracies. Section 1681s-2(b)(1) of the FCRA states that a furnisher of consumer information must conduct an investigation of disputed information upon receiving notice from a consumer reporting agency (CRA) that the consumer has disputed the accuracy of the information. Many courts have interpreted this to require furnishers to reasonably investigate factual questions, but not disputed legal issues (e.g., whether a consumer is liable for a reported debt). By contrast, the CFPB’s brief asks the Eleventh Circuit to “clarify that furnishers are required to conduct reasonable investigations of both legal and factual questions posed in consumer disputes.”
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In a new blog post published on the Consumer Law & Policy Blog, Professor Jeff Sovern advocates very strongly in support of interpreting the “unfairness” prong of UDAAP to encompass discrimination in connection with credit and non-credit consumer financial products and services offered by banks and other persons covered by the Consumer Financial Protection Act (CFPA). He supports his position by relying on the plain language of “unfair” (which is not inextricably tied to credit products) and the common sense notion that companies should not be able to discriminate in any fashion in connection with offering of consumer financial products or services.
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