DOJ recently issued its 2016 Annual Report summarizing its enforcement activities related to lending discrimination prohibited by the Equal Credit Opportunity Act (ECOA), the Fair Housing Act (FHA), and the Servicemembers Civil Relief Act (SCRA). DOJ’s Civil Rights Division is responsible for enforcing the aforementioned statutes. As such, and as in past years, the Report concentrates on DOJ’s enforcement efforts related to alleged fair lending discriminatory practices. The 2016 Report highlighted DOJ’s continued focus on redlining enforcement actions, but also addressed a wide range of fair lending issues, noting that at the end of 2016, 33 fair lending investigations were active. Such investigations involve illegal practices such as discrimination related to national origin, discrimination related to familial status, and predatory lending towards minority homeowners. Finally, the Report highlighted DOJ’s continued “inter-agency collaboration” with agencies such as the CFPB, HUD, and the FTC.
As in the past several years, purported redlining discrimination remains a top priority for DOJ’s Civil Rights Division with respect to ECOA and FHA enforcement. As we previously explained in our report of one such redlining settlement entered into jointly with the DOJ and CFPB in 2016, redlining enforcement actions often stem from allegations that a lender places branches outside of minority neighborhoods, thereby avoiding and discouraging consumers in minority neighborhoods from accessing mortgages. In addition to DOJ’s efforts to curb redlining practices, lenders can expect the CFPB to continue to look for alleged discriminatory conduct based on recent statements that the agency will “continue to evaluate whether lenders have intentionally avoided lending in minority neighborhoods.”
With respect to DOJ’s “inter-agency collaboration” efforts, the Report notes that DOJ has “routinely entered into information-sharing agreements with the relevant entities to ensure effective collaboration.” Such collaboration often involves referrals from agencies that participate in the Federal Interagency Fair Lending Task Force. Indeed, the Report noted that DOJ received 22 referrals from other agencies in 2016 (CFPB – 8, Federal Reserve Board – 7, HUD -2, OCC -1), and that six of the seven fair lending lawsuits filed by the Civil Rights Division were based on referrals from other agencies. As such, lenders should be keenly aware that information provided to one federal agency often makes its way to other agencies. Aside from the information sharing agreements between the agencies themselves, several federal statutes, such as the False Claims Act and Inspector General Act, provide broad authority to share information received in response to a subpoena or civil investigative demand.
The 2016 ECOA Report is available here.