Fair Lending Report of the Bureau of Consumer Financial Protection, December 2018, 2824-2833 [2019-01568]

Download as PDF 2824 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices Agency Land And Maritime Patricia Briscoe, Deputy Director, Business Operations, (Pricing and Information Management). [FR Doc. 2019–01650 Filed 2–7–19; 8:45 am] BILLING CODE 6353–01–P BUREAU OF CONSUMER FINANCIAL PROTECTION Fair Lending Report of the Bureau of Consumer Financial Protection, December 2018 Bureau of Consumer Financial Protection. ACTION: Fair Lending Report of the Bureau of Consumer Financial Protection. AGENCY: The Bureau of Consumer Financial Protection (Bureau) is issuing its sixth Fair Lending Report of the Bureau of Consumer Financial Protection (Fair Lending Report) to Congress. The Bureau is committed to ensuring fair access to credit and eliminating discriminatory lending practices. This report describes the Bureau’s fair lending activities in prioritization, supervision, enforcement, rulemaking, interagency coordination, and outreach for calendar year 2017. DATES: The Bureau released the December 2018 Fair Lending Report on its website on December 4, 2018. FOR FURTHER INFORMATION CONTACT: Anita Visser, Senior Policy Advisor to the Director of Fair Lending, Office of Fair Lending and Equal Opportunity, at 1–855–411–2372. If you require this document in an alternative electronic format, please contact CFPB_ Accessibility@cfpb.gov. SUPPLEMENTARY INFORMATION: SUMMARY: 1. Fair Lending Report of the Bureau of Consumer Financial Protection, December 2018 amozie on DSK3GDR082PROD with NOTICES1 Message from Mick Mulvaney, Acting Director This Fair Lending Report of the Bureau of Consumer Financial Protection describes the Bureau’s fair lending activities for 2017, consistent with its statutory mandate to ensure that consumers are protected from discrimination (12 U.S.C. 5511(b)(2)). These efforts included: • Providing oversight and enforcement of Federal laws intended to ensure the fair, equitable, and nondiscriminatory access to credit for both individuals and communities that are enforced by the Bureau, including the Equal Credit Opportunity Act VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 (ECOA) 1 and the Home Mortgage Disclosure Act (HMDA); 2 • Coordinating fair lending efforts of the Bureau with other Federal agencies and State regulators, as appropriate, to promote consistent, efficient, and effective enforcement of Federal fair lending laws; and • Working with private industry, fair lending, civil rights, consumer and community advocates on the promotion of fair lending compliance and education. This report fulfills the Bureau’s statutory responsibility to, among other things, report annually to Congress on public enforcement actions taken by other agencies with administrative enforcement responsibilities under ECOA, and assessments of the extent to which compliance with ECOA has been achieved (15 U.S.C. 1691f). It also fulfills the statutory requirement that the Bureau, in consultation with HUD, report annually on the utility of HMDA’s requirement that covered lenders itemize certain mortgage loan data (12 U.S.C. 2807). Sincerely, Mick Mulvaney, Message from Patrice Alexander Ficklin Director, Office of Fair Lending and Equal Opportunity. In 2017, the Office of Fair Lending and Equal Opportunity completed its sixth full year of stewardship over the Bureau’s efforts to fulfill its fair lending mandate. 2017 was distinguished as a year in which the Office continued to focus on promoting fair, equitable and nondiscriminatory access to credit in mortgage lending, deepened its supervisory work in servicing and small business lending, and embarked on new efforts to encourage innovation in expanding credit access. Mortgage lending remained a priority for the Bureau’s fair lending supervisory and enforcement activity, focusing on redlining, underwriting, pricing, steering, servicing and HMDA data integrity. The Bureau announced a significant HMDA enforcement action in 2017, reinforcing the importance of the legal requirement that covered mortgage lenders must report accurate data about mortgage transactions. HMDA data is a critical component of the effective enforcement of fair lending laws. Beyond mortgages, we know that other lending markets play a vital role in allowing consumers to fully participate as stakeholders in our economy, strengthening our communities, and expanding U.S.C. 1691 et seq. 2 12 U.S.C. 2801 et seq. Frm 00018 Fmt 4703 Sincerely, Patrice Alexander Ficklin Executive Summary The Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank or Dodd-Frank Act) 4 established the Office of Fair Lending and Equal Opportunity (the Office of Fair Lending) within the Bureau, and vested it with such powers and duties as the Bureau’s Director may delegate to it, including: (A) Providing oversight and enforcement of Federal laws intended to ensure the fair, equitable, and nondiscriminatory access to credit for both individuals and communities that are enforced by the Bureau, including the Equal Credit Opportunity Act and the Home Mortgage Disclosure Act; (B) Coordinating fair lending efforts of the Bureau with other Federal agencies and State regulators, as appropriate, to promote consistent, efficient, and 3 See Dodd-Frank Act section 1013(c)(2)(D) (codified at 12 U.S.C. 5493(c)(2)(D)). 4 Public Law 111–203, 124 Stat. 1376 (2010). 1 15 PO 00000 opportunities to build wealth for businesses and consumers alike. In 2017, the Bureau announced an enforcement action addressing discrimination in the terms and conditions of credit cards, and conducted significant fair lending supervisory activity in student loan servicing and small business lending. The Office continued to partner with colleagues across the Bureau in outreach to support innovation that promotes ‘‘fair, equitable, and nondiscriminatory access to credit for both individuals and communities,’’ culminating in the Bureau’s issuance of its first no-action letter (NAL) to Upstart Network, Inc., a company that uses alternative data in making credit and pricing decisions. I led the Bureau’s engagement with Upstart, in furtherance of our interest in exploring methods of achieving fair lending compliance in conjunction with the use of alternative data and the potential benefits of such data in expanding credit access. As 2017 drew to a close, the Office welcomed Acting Director Mick Mulvaney, and began work to implement his commitment to enforce the fair lending laws under the Bureau’s jurisdiction. I am proud of the Office’s work not only in 2017, but also throughout its history in fulfilling its Dodd-Frank mandate to protect America’s consumers from lending discrimination and promote credit access. To that end, I am excited to share our progress with this, our sixth, Fair Lending Report.3 Sfmt 4703 E:\FR\FM\08FEN1.SGM 08FEN1 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices effective enforcement of Federal fair lending laws; (C) Working with private industry, fair lending, civil rights, consumer and community advocates on the promotion of fair lending compliance and education; and (D) Providing annual reports to Congress on the efforts of the Bureau to fulfill its fair lending mandate.5 The law also requires the Bureau to file an annual report to Congress describing the administration of its functions under the Equal Credit Opportunity Act (ECOA), summarizing public enforcement actions taken by other agencies with administrative enforcement responsibilities under ECOA, and providing an assessment of the extent to which compliance with ECOA has been achieved.6 In addition, the law requires the Bureau, in consultation with U.S. Department of Housing and Urban Development (HUD), to report annually on the utility of the Home Mortgage Disclosure Act’s (HMDA) requirement that covered lenders itemize certain mortgage loan data.7 This report to Congress from the Office of Fair Lending is intended to fulfill those requirements and report on the Bureau’s efforts to fulfill its fair lending mandate during calendar year 2017.8 1. Interagency Reporting on ECOA and HMDA The law requires the Bureau to file a report to Congress annually describing the administration of its functions under ECOA, summarizing public enforcement actions taken by other agencies with administrative enforcement responsibilities under ECOA, and providing an assessment of the extent to which compliance with ECOA has been achieved.9 In addition, the Bureau’s annual HMDA reporting requirement calls for the Bureau, in consultation with HUD, to report annually on the utility of HMDA’s requirement that covered lenders itemize certain mortgage loan data.10 1.1 ECOA Enforcement The enforcement efforts and compliance assessments made by all the agencies assigned enforcement authority under section 704 of ECOA are discussed in this section. 1.1.1 Public Enforcement Actions In addition to the Bureau, the agencies charged with administrative 2825 enforcement of ECOA under section 704 include: The Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board (FRB), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC), (collectively, the Federal Financial Institutions Examination Council (FFIEC) agencies); 11 Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture (USDA),12 the Department of Transportation (DOT), the Farm Credit Administration (FCA), the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), and the Small Business Administration (SBA).13 In 2017, the Bureau brought one public enforcement action for violations of ECOA, and the other agencies reported that they brought no public enforcement actions related to ECOA in 2017. 1.1.2 Violations Cited During ECOA Examinations Among institutions examined for compliance with ECOA and Regulation B, the FFIEC agencies reported that the most frequently-cited violations were: amozie on DSK3GDR082PROD with NOTICES1 TABLE 1—REGULATION B VIOLATIONS CITED BY FFIEC AGENCIES: 2017 FFIEC Agencies reporting Regulation B violations: 2017 The Bureau, FDIC, FRB, NCUA, OCC ..... 12 CFR 1002.4(a): Discrimination on a prohibited basis in a credit transaction. 12 CFR 1002.5(b): Improperly inquiring about the race, color, religion, national origin, or sex of an applicant or any other person in connection with a credit transaction. 12 CFR 1002.7(d)(1), (d)(6): Improperly requiring the signature of an applicant’s spouse or other person if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested; improperly imposing requirements upon an additional party that the creditor is prohibited from imposing upon an applicant. 12 CFR 1002.9(a)(1), (a)(1)(i), (a)(2), (b), (b)(2), (c)(1)(i): Failure to provide notice to the applicant 30 days after receiving a completed application concerning the creditor’s approval of, counteroffer or adverse action on the application; failure to provide appropriate notice to the applicant 30 days after taking adverse action on an incomplete application; failure to provide sufficient information in an adverse action notification, including the specific reasons for the action taken. 12 CFR 1002.12(b)(1): Failure to preserve records of actions taken on an application or of incompleteness. 12 CFR 1002.13(a)(1)(i), (b): Failure to request information on an application regarding an applicant’s ethnicity, race, sex, marital status, and age, or note, to the extent possible, the ethnicity, race, and sex of an applicant on the basis of visual observation or surname if not provided by the applicant. 12 CFR 1002.14(a), (a)(2): Failure to routinely provide an applicant with a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling, and/or failure to provide an applicant with a copy of an appraisal report upon an applicant’s written request. 5 Dodd-Frank Act section 1013(c)(2)(A), (B) and (C) (codified at 12 U.S.C. 5493(c)(2)(A), (B), and (C)). 6 15 U.S.C. 1691f. 7 12 U.S.C. 2807. 8 See Dodd-Frank Act section 1013(c)(2)(D), Public Law 111–203, 124 Stat. 1376 (2010) (codified at 12 U.S.C. 5493(c)(2)(D)). 9 15 U.S.C. 1691f. 10 12 U.S.C. 2807. 11 The FFIEC is a ‘‘formal interagency body empowered to prescribe uniform principles, VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 standards, and report forms for the Federal examination of financial institutions’’ by the member agencies listed above and the State Liaison Committee ‘‘and to make recommendations to promote uniformity in the supervision of financial institutions.’’ Federal Financial Institutions Examination Council, http://www.ffiec.gov (last visited April 5, 2018). The FFIEC member agencies are the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Bureau PO 00000 Frm 00019 Fmt 4703 Sfmt 4703 of Consumer Financial Protection (Bureau). The State Liaison Committee was added to FFIEC in 2006 as a voting member. 12 The Grain Inspection, Packers and Stockyards Administration (GIPSA) was eliminated as a standalone agency within USDA in 2017. The functions previously performed by GIPSA have been incorporated into the Agricultural Marketing Service (AMS), and ECOA reporting now comes from the Packers and Stockyards Division, Fair Trade Practices Program, AMS. 13 15 U.S.C. 1691c. E:\FR\FM\08FEN1.SGM 08FEN1 2826 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices TABLE 2—REGULATION B VIOLATIONS CITED BY OTHER ECOA AGENCIES: 2017 Other ECOA agencies Regulation B violations: 2017 FCA ........................................................... 12 CFR 1002.9(a)(1)(i): Failure to provide notice to the applicant 30 days after receiving a completed application concerning the creditor’s approval of, counteroffer or adverse action on the application. 12 CFR 1002.13: Failure to request and collect information for monitoring purposes. The AMS, the SEC, and the SBA reported that they received no complaints based on ECOA or Regulation B in 2017. In 2017, the DOT reported that it received a ‘‘small number of consumer inquiries or complaints concerning credit matters possibly covered by ECOA,’’ which it ‘‘processed informally.’’ The FTC is an enforcement agency and does not conduct compliance examinations. amozie on DSK3GDR082PROD with NOTICES1 1.2 Referrals to the Department of Justice In 2017, the FFIEC agencies including the Bureau, referred a total of 11 ECOA matters involving discrimination in violation of ECOA to the Department of Justice (DOJ or Justice Department). The FDIC referred four matters to the DOJ involving discrimination in credit transactions on the prohibited bases of age, marital status, sex, and national origin. The FRB referred three matters to the DOJ involving discrimination in credit transactions on the prohibited basis of marital status. The NCUA referred two matters to the DOJ involving discrimination in credit transactions on the prohibited bases of marital status, receipt of public assistance income, and sex. The Bureau referred two matters to the DOJ involving discrimination in mortgage servicing on the prohibited basis of the receipt of public assistance income, and discrimination in credit card account management, installment lending, and mortgage servicing on the prohibited bases of national origin and race. 1.3 Reporting on the Home Mortgage Disclosure Act The Bureau’s annual HMDA reporting requirement calls for the Bureau, in consultation with HUD, to report annually on the utility of HMDA’s requirement that covered lenders itemize loan data in order to disclose the number and dollar amount of certain mortgage loans and applications, grouped according to various characteristics.14 The Bureau, in consultation with HUD, finds that itemization and tabulation of these data further the purposes of HMDA. For more information on HMDA and its implementing regulation, Regulation C 14 See 12 U.S.C. 2807. VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 with regard to guidance and rulemaking, please see the Rulemaking section of this report (Section 5).15 2. The Bureau’s Fair Lending Prioritization 2.1 Risk-Based Prioritization Because Congress charged the Bureau with responsibility for overseeing many lenders and products, the Office uses a risk-based approach to prioritize supervisory examinations and enforcement activity, to help ensure focus on areas that present substantial risk of credit discrimination for consumers. As part of the prioritization process, the Bureau identifies emerging developments and trends by monitoring key consumer financial markets. If this market intelligence identifies fair lending risks in a particular market that require further attention, that information is incorporated into the prioritization process to determine the type and extent of attention required to address those risks. For instance, our monitoring highlighted potential steering risks in student loan servicing, which resulted in the prioritization of this market in our supervisory work in 2017. The fair lending prioritization process incorporates a number of additional factors as well, including: Consumer complaints; tips and leads from advocacy groups, whistleblowers, and government agencies; supervisory and enforcement history; and results from analysis of HMDA and other data. Once Fair Lending has evaluated these inputs to prioritize institutions, products, and markets based on an assessment of fair lending risk posed to consumers, it considers how best to address those risks as part of its annual strategic planning process. Potential actions include scheduling an institution for a supervisory review, opening an enforcement investigation where appropriate, conducting further research, policy development, or outreach. Once this strategic planning 15 For more information on recent developments in HMDA and Regulation C, see: https:// www.consumerfinance.gov/about-us/newsroom/ bureau-consumer-financial-protection-issuesstatement-implementation-economic-growthregulatory-relief-and-consumer-protection-actamendments-home-mortgage-disclosure-act/. PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 process is complete, we regularly coordinate with other regulators so we can inform each other’s work, complement each other’s efforts where appropriate, and reduce burden on subject institutions. Risk-based prioritization is an ongoing process, and the Bureau continues to receive and evaluate relevant information even after priorities are identified. Such information may include new tips and leads about specific institutions, consumer complaints, additional risks identified in current supervisory and enforcement activities, and compliance issues self-identified by institutions. In determining how best to address this additional information, Fair Lending considers several factors, including (1) the nature and extent of the fair lending risk, (2) the degree of consumer harm, and (3) whether the risk was selfidentified and/or self-reported to the Bureau. It also takes account of welldeveloped fair lending compliance management systems 16 and other responsible conduct as set forth in CFPB Bulletin 2013–06, Responsible Business Conduct: Self-Policing, Self-Reporting, Remediation, and Cooperation.17 2.2 Fair Lending Priorities As a result of its annual risk-based prioritization analyses, in 2017 the Bureau focused on: 18 • Redlining: Whether lenders intentionally discouraged prospective applicants in minority neighborhoods from applying for credit. • Mortgage and Student Loan Servicing: Whether some borrowers who were behind on their mortgage or student loan payments may have been negatively impacted in their ability to 16 The Bureau previously has identified common features of a well-developed fair lending compliance management system: Consumer Financial Protection Bureau, Fair Lending Report of the Consumer Financial Protection Bureau at 13–14 (Apr. 2014), http://files.consumerfinance.gov/f/ 201404_cfpb_report_fair-lending.pdf. 17 Consumer Financial Protection Bureau, Responsible Business Conduct: Self-Policing, SelfReporting, Remediation, and Cooperation, CFPB Bulletin 2013–06 (June 25, 2013), http:// files.consumerfinance.gov/f/201306_cfpb_bulletin_ responsible-conduct.pdf. 18 Patrice Ficklin, Fair Lending priorities in the new year, Consumer Financial Protection Bureau (Dec. 16, 2016), http://www.consumerfinance.gov/ about-us/blog/fair-lending-priorities-new-year/. E:\FR\FM\08FEN1.SGM 08FEN1 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices amozie on DSK3GDR082PROD with NOTICES1 work out a new solution with the servicer because of their race, ethnicity, sex, or age. • Small Business Lending: Whether institutions are complying with the Congressional mandate to not discriminate on a prohibited basis in small business lending. Focus in this area includes improving Bureau understanding of: Small business lending credit processes; existing data collection processes; and the nature, extent, and management of fair lending risk in small business lending. Congress required the Bureau to promulgate a regulation governing small business loan data collection in order to ‘‘facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.’’ 19 Small business lending supervisory activity has helped expand and enhance the Bureau’s knowledge in this area, including the credit process; existing data collection processes; and the nature, extent, and management of fair lending risk. • The Bureau remains committed to ensuring that consumers are protected from discrimination in all credit markets under its legal authority. 3. Fair Lending Supervision The Bureau’s Fair Lending Supervision program assesses compliance with ECOA and HMDA at banks and nonbanks over which the Bureau has supervisory authority. Supervision activities in 2017 ranged from assessments of institutions’ fair lending compliance management systems to in-depth reviews of products or activities that may pose heightened fair lending risks to consumers. As part of its Fair Lending Supervision program, the Bureau conducted three types of fair lending reviews: ECOA baseline reviews, ECOA targeted reviews, and HMDA data integrity reviews. As a general matter, if such a review finds that an institution’s fair lending compliance is inadequate, the Bureau communicates its supervisory expectations to the institution to help the institution establish fair lending compliance programs commensurate with the size and complexity of the institution and its lines of business.20 Institutions may provide remediation 19 See Dodd-Frank Act, Public Law 111–203, sec. 1071, 704B(a). 20 For recent updates to the types of supervisory communications, see https://s3.amazonaws.com/ files.consumerfinance.gov/f/documents/bcfp_ bulletin-2018-01_changes-to-supervisorycommunications.pdf. VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 and restitution to consumers in response to violations of fair lending laws identified in the review, and the Bureau may pursue other appropriate relief. The Bureau also refers matters to the Justice Department when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination in violation of ECOA.21 The Bureau also may refer other potential ECOA violations to the Justice Department.22 3.1 Fair Lending Supervisory Observations The Bureau published results of certain 2017 supervisory exams in Supervisory Highlights. Those findings are also summarized below. 3.1.1 Update to Proxy Methodology The Spring 2017 edition of Supervisory Highlights,23 published in April 2017, discussed updates to the Bayesian Improved Surname Geocoding (BISG) proxy methodology for race and ethnicity,24 which relies in part on publically available information from the Census. In December 2016, the U.S. Census Bureau released a list of the most frequently-occurring surnames based on the most recent census, which includes values for total counts and race and ethnicity shares associated with each surname. In total, the list provides information on the 162,253 surnames that appear at least 100 times in the most recent census, covering approximately 90% of the population.25 In April 2017, examination teams began relying on an updated proxy methodology that reflected the newly available surname data from the Census Bureau.26 21 15 U.S.C. 1691e(g). 22 Id. 23 Consumer Financial Protection Bureau, Supervisory Highlights Spring 2017 at 14–15 (April 26, 2017), https://www.consumerfinance.gov/ documents/4608/201704_cfpb_SupervisoryHighlights_Issue-15.pdf. 24 For more information on the Bureau’s use of BISG in 2017 and previously, see Consumer Financial Protection Bureau, Supervisory Highlights Summer 2014 at 10–13 (September 17, 2014), http://files.consumerfinance.gov/f/201409_cfpb_ supervisory-highlights_auto-lending_summer2014.pdf. 25 The surname data are available on the Census Bureau’s website, see Frequently Occurring Surnames from the 2010 Census (last revised December 27, 2016), https://www.census.gov/ topics/population/genealogy/data/2010_ surnames.html. 26 The new surname list; statistical software code, written in Stata; and other publicly available data used to build the BISG proxy are available at: https://github.com/cfpb/proxy-methodology. PO 00000 Frm 00021 Fmt 4703 Sfmt 4703 2827 3.1.2 Mortgage Servicing The Summer 2017 edition of Supervisory Highlights 27 reported on the Bureau’s fair lending work in mortgage servicing. As part of its fair lending work, the Bureau seeks to ensure that creditors do not discriminate on any prohibited bases. Mortgage servicing, and specifically default servicing, may introduce fair lending risks because of the complexity of certain processes, the range of default servicing options, and the discretion that can sometimes exist in evaluating and selecting among available default servicing options. In mortgage servicing, the Bureau’s supervisory work has included use of the Mortgage Servicing Exam Procedures and the ECOA Baseline Modules, both of which are part of the Bureau’s publically-available Supervision and Examination Manual. Bureau examination teams use these procedures to conduct ECOA Baseline Reviews, which evaluate institutions’ compliance management systems (CMS), or ECOA Targeted Reviews, which are more in-depth reviews of activities that may pose heightened fair lending risks to consumers. These exam procedures contain questions about, among other things, the fair lending training of servicing staff, fair lending monitoring of servicing, and servicing of consumers with limited English proficiency. In one or more ECOA targeted reviews of mortgage servicers, Bureau examiners found weaknesses in fair lending CMS. In general, examiners found deficiencies in oversight by board and senior management, monitoring and corrective action processes, compliance audits, and oversight of third-party service providers. In one or more examinations, data quality issues, which were related to a lack of complete and accurate loan servicing records, made certain fair lending analyses difficult or impossible to perform. Examiners attributed these data quality issues to significant weaknesses in CMS-related policies, procedures, and service provider oversight. Separately, fair lending analysis at one or more mortgage servicers was affected by a lack of readily-accessible information concerning a borrower’s ethnicity, race, and sex information that had been collected pursuant to Regulation C and transferred to the 27 Consumer Financial Protection Bureau, Supervisory Highlights Summer 2017 at 32–33 (September 12, 2017), https:// www.consumerfinance.gov/documents/5386/ 201709_cfpb_Supervisory-Highlights_Issue-16.pdf. E:\FR\FM\08FEN1.SGM 08FEN1 2828 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices servicer. One or more mortgage servicers acknowledged the importance of retaining in readily-accessible format— for the express purpose of performing future fair lending analyses—ethnicity, race, and sex data that it had received in the borrower’s origination file. 4. Fair Lending Enforcement The Bureau conducts investigations of potential violations of HMDA and ECOA, and if it believes a violation has occurred, can file a complaint either through its administrative enforcement process or in Federal court. Like the other Federal bank regulators, the Bureau refers matters to the DOJ when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination.28 However, when the Bureau makes a referral to the DOJ, the Bureau can still take its own independent action to address a violation. In 2016, the Bureau announced two fair lending enforcement actions in mortgage origination and indirect auto lending. The Bureau also has a number of ongoing fair lending investigations and has authority to settle or sue in a number of matters. In addition, the Bureau issued warning letters to mortgage lenders and mortgage brokers that may be in violation of HMDA requirements to report on housingrelated lending activity. 4.1 Fair Lending Public Enforcement Actions 4.1.1 Mortgage amozie on DSK3GDR082PROD with NOTICES1 Nationstar Mortgage LLC On March 15, 2017, the Bureau resolved an enforcement action against Nationstar Mortgage LLC (Nationstar) for violating HMDA by submitting mortgage loan data for 2012 through 2014 containing substantial errors. HMDA requires many mortgage lenders to collect and report data about their mortgage lending to appropriate Federal agencies and make it available to the public. The consent order requires Nationstar to pay a $1.75 million penalty to the Bureau’s Civil Penalty Fund. The Nationstar action is the largest HMDA civil penalty imposed to date by the Bureau, which stems from Nationstar’s market size, the substantial magnitude of its errors, and its history of previous violations. In addition to paying the civil penalty, Nationstar must take the necessary steps to improve its compliance management and prevent 28 15 U.S.C. 1691e(g). VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 future violations.29 Nationstar also must review, correct, and make available its corrected HMDA data from 2012–14. Since the Bureau’s examination, Nationstar has been taking steps to improve its HMDA compliance management system and increase the accuracy of its HMDA reporting. Nationstar, a nationwide nonbank mortgage lender headquartered in Coppell, Texas (now doing business as Mr. Cooper), is a wholly-owned subsidiary of Nationstar Mortgage Holdings Inc. With nearly 3 million customers, Nationstar Mortgage Holdings is a major participant in the mortgage servicing and origination markets. According to 2014 data, Nationstar was the ninth-largest HMDA reporter by total mortgage originations, the sixth largest by applications received, and the thirteenth largest by money lent. From 2010 to 2014, Nationstar’s number of HMDA mortgage loans increased by nearly 900 percent. In its supervision process, the Bureau found that Nationstar’s HMDA compliance systems were deficient, and not reasonably adapted to avoid the identified errors. Specifically, Nationstar failed to maintain detailed HMDA data collection and validation procedures, and failed to implement adequate compliance procedures, even after it knew was required to improve its HMDA compliance. It also produced HMDA data discrepancies by failing to consistently define data among its various lines of business. Nationstar has a history of HMDA non-compliance. In 2011, the Commonwealth of Massachusetts Division of Banks reached a settlement with Nationstar to address HMDA compliance deficiencies. The samples reviewed by the Bureau showed substantial error rates in three consecutive reporting years, even after the Massachusetts settlement was reached. In the samples reviewed, the Bureau found error rates of 13 percent in 2012, 33 percent in 2013, and 21 percent in 2014. 4.1.2 Credit Cards American Express Centurion Bank and American Express Bank, FSB On August 23, 2017, the Bureau took action against American Express Centurion Bank and American Express Bank, FSB (collectively referred to as American Express), for violating ECOA by discriminating against consumers in Puerto Rico, the U.S. Virgin Islands, and 29 Consent Order, In the Matter of Nationstar Mortgage LLC, File No. 2017–CFPB–0011 (Mar. 15, 2017), http://files.consumerfinance.gov/f/ documents/201703_cfpb_Nationstar-Mortgageconsent-order.pdf. PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 other U.S. territories by providing them with credit and charge card terms that were inferior in many respects to those available in the 50 U.S. states. American Express also discriminated against certain consumers with Spanishlanguage preferences by not providing them certain charge card collection offers that were provided to similarlysituated consumers without Spanishlanguage preferences. Over the course of at least ten years, more than 200,000 of these consumers were harmed by American Express’s discriminatory practices. American Express has paid approximately $95 million in consumer redress during the course of the Bureau’s review and American Express’s review, and the Bureau Order requires it to pay at least another $1 million to fully compensate harmed consumers.30 Beginning in 2013, American Express self-reported to the Bureau differences between terms associated with its Puerto Rico and U.S. Virgin Islands cards (collectively, Puerto Rico cards) and its cards offered in the 50 U.S. states (U.S. cards), as well as differences with respect to certain consumers with a Spanish-language preference. Through the course of a supervisory review, the Bureau concluded that, from at least 2005 to 2015, American Express’s Puerto Rico cards had different, and often worse, pricing, rebates, promotional offers, underwriting, customer and account management services, and collections practices than its U.S. cards. These differences spanned the product lifecycle and included: Charging higher fees and interest rates and offering less advantageous pricing on promotional offers; imposing more stringent credit score cutoffs and lower credit limits; applying certain inferior servicing policies; and requiring more money to settle debt. The Bureau’s review found that these differences constituted discrimination on the prohibited bases of race and national origin in violation of ECOA. Under the terms of the Bureau Order, American Express must develop and implement a comprehensive compliance plan to ensure that it provides credit and charge cards in a nondiscriminatory manner to consumers in Puerto Rico, the U.S. territories, and customers in collection who prefer Spanish-language communications. The compliance plan must include any 30 Consent Order, In the Matter of American Express Centurion Bank and American Express Bank, FSB, File No. 2017–CFPB–0016 (Aug. 23, 2017), https://s3.amazonaws.com/ files.consumerfinance.gov/f/documents/201708_ cfpb_american-express_content-order.pdf. E:\FR\FM\08FEN1.SGM 08FEN1 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices necessary additional improvements to its compliance management system; compliance audit program; credit and charge card business structure, policies, and procedures; employee training procedures; and complaints procedures. During the Bureau’s review, American Express provided monetary and nonmonetary relief to harmed consumers, resulting in approximately $95 million of remediation. The Bureau did not assess penalties based on a number of factors, including that American Express self-reported the violations to the Bureau, self-initiated remediation for the harm done to affected consumers, and fully cooperated with the Bureau’s review and investigation. 4.2 Implementing Enforcement Orders When an enforcement action is resolved through a public enforcement order, the Bureau (together with the Justice Department, when relevant) takes steps to ensure that the respondent or defendant complies with the requirements of the order. As appropriate to the specific requirements of individual public enforcement orders, the Bureau may take steps to ensure that borrowers who are eligible for compensation receive remuneration and that the defendant has complied with the injunctive provisions of the order, including implementing a comprehensive fair lending compliance management system. Throughout 2017, the Bureau worked to implement and oversee compliance with the pending public enforcement orders that were entered by Federal courts or issued by the Bureau’s Director in prior years. 4.2.1 Settlement Administration Settlement Administration amozie on DSK3GDR082PROD with NOTICES1 Toyota Motor Credit Corporation On December 29, 2017, participation materials were mailed to potentially eligible African-American and Asian and Pacific Islander borrowers whom Toyota Motor Credit overcharged for their auto loans notifying them how to participate in the settlement, resulting from a 2016 enforcement action brought by the Bureau and Justice Department against Toyota for alleged discrimination in auto lending.31 Provident Funding Associates On November 2, 2017, the Bureau announced the mailing of remuneration checks to consumers, totaling $9 million, plus accrued interest, to eligible borrowers resulting from a 2015 31 Consent Order, In re Toyota Motor Credit Corp., CFPB No. 2016–CFPB–0002 (Feb. 2, 2016), http:// files.consumerfinance.gov/f/201602_cfpb_consentorder-toyota-motor-credit-corporation.pdf. VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 enforcement action brought by the Bureau and Justice Department against Provident for alleged discrimination in mortgage lending.32 American Honda Finance Corporation On October 2, 2017, participating African-American, Hispanic, and Asian and/or Pacific Islander borrowers, whom Honda Finance overcharged for their auto loans, were mailed checks totaling $24 million, plus accrued interest, resulting from a 2015 enforcement action brought by the Bureau and Justice Department against Honda for alleged discrimination in auto lending.33 Ally Financial Inc. and Ally Bank In 2017, Ally Financial Inc. and Ally Bank completed their payments totaling $48.8 million to consumers whom Ally determined were both eligible and overcharged on auto loans booked during 2016 pursuant to the December 2013 enforcement actions and consent orders with the Justice Department and the Bureau. 4.3 ECOA Referrals to the Department of Justice The Bureau must refer to the Justice Department a matter when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination in violation of ECOA.34 The Bureau also may refer other potential ECOA violations to the DOJ.35 In 2017, the Bureau referred two matters with ECOA violations to the Justice Department. In both of the matters, the DOJ deferred to the Bureau’s handling of the matters and declined to open its own investigation. The Bureau’s referrals to the DOJ in 2017 involved discrimination in mortgage servicing on the basis of the receipt of public assistance income, and discrimination in credit card account management, installment lending, and mortgage servicing on the bases of national origin and race. 4.4 Pending Fair Lending Investigations In 2017, the Bureau had a number of ongoing fair lending investigations of a 32 Patrice Alexander Ficklin, African-American and Hispanic borrowers harmed by Provident will receive $9 million in compensation, Consumer Financial Protection Bureau (Nov. 2, 2017), https:// www.consumerfinance.gov/about-us/blog/africanamerican-and-hispanic-borrowers-harmedprovident-will-receive-9-million-compensation/. 33 Consent Order, In re American Honda Finance Corp., CFPB No. 2015–CFPB–0014 (July 14, 2015), http://files.consumerfinance.gov/f/201507_cfpb_ consent-order_honda.pdf. 34 15 U.S.C. 1691e(g). 35 Id. PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 2829 number of institutions involving a variety of consumer financial products. Consistent with the Bureau’s risk-based priorities, one key area on which the Bureau focused its fair lending enforcement efforts was addressing potential discrimination in mortgage lending, including the unlawful practice of redlining. Redlining occurs when a lender provides unequal access to credit, or unequal terms of credit, because of the racial or ethnic composition of a neighborhood. At the end of 2017, the Bureau had a number of pending investigations in this and other areas. 5. Guidance and Rulemaking 5.1 HMDA and Regulation C Consistent with the Bureau’s obligation to work with private industry to ‘‘promot[e] fair lending . . . compliance,’’ in 2017 the Bureau published several regulatory and guidance documents related to HMDA and Regulation C, as reported below.36 On August 22, 2017, the Bureau, together with the other member agencies of the FFIEC, announced new FFIEC HMDA Examiner Transaction Testing Guidelines (Guidelines) for all financial institutions that report HMDA data.37 The Guidelines will apply to the examination of HMDA data collected beginning in 2018, and reported beginning in 2019. The Bureau issued a proposed rule in April 2017 38 seeking comment on amendments to certain provisions of the 2015 HMDA Final Rule to make technical corrections and to clarify certain requirements under Regulation C, and issued a second proposal in July 2017 39 to increase temporarily the institutional and transactional coverage thresholds for open-end lines of credit. On August 24, 2017, after reviewing the 36 See Dodd-Frank Act section 1013(c)(2)(C), Public Law 111–203, 124 Stat. 1376 (2010) (codified at 12 U.S.C. 5493(c)(2)(C)). 37 FFIEC HMDA Examiner Transaction Testing Guidelines, https://s3.amazonaws.com/ files.consumerfinance.gov/f/documents/201708_ cfpb_ffiec-hmda-examiner-transaction-testingguidelines.pdf. 38 Technical Corrections and Clarifying Amendments to the Home Mortgage Disclosure (Regulation C) October 2015 Final Rule, https:// www.consumerfinance.gov/policy-compliance/ rulemaking/rules-under-development/technicalcorrections-and-clarifying-amendments-homemortgage-disclosure-october-2015-final-rule/. 39 Home Mortgage Disclosure (Regulation C), Temporary Increase in Institutional and Transactional Coverage Thresholds for Open-End Lines of Credit, https://www.consumerfinance.gov/ policy-compliance/rulemaking/rules-underdevelopment/home-mortgage-disclosure-regulationc-temporary-increase-institutional-andtransactional-coverage-thresholds-open-end-linescredit/. E:\FR\FM\08FEN1.SGM 08FEN1 2830 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices comments received, the Bureau issued a final rule amending Regulation C.40 On September 20, 2017, the Bureau issued proposed policy guidance regarding the data the Bureau may make available to the public beginning in 2019 from the HMDA data collected by financial institutions in or after 2018. The proposal described the modifications that the Bureau intends to apply to the loan-level HMDA data to protect applicant and borrower privacy, and it sought comment on those proposals.41 In December 2017, the FFIEC agencies issued public statements on HMDA implementation announcing that the Bureau does not intend to require data resubmission unless data errors are material or assess penalties with respect to errors in data collected in 2018 and reported in 2019 under HMDA. The Bureau’s statement also announced that the Bureau intends to engage in a rulemaking to reconsider various aspects of the 2015 HMDA Rule such as the institutional and transactional coverage tests and the rule’s discretionary data points.42 amozie on DSK3GDR082PROD with NOTICES1 5.1.1 HMDA Announcement On December 21, 2017, the Bureau issued the following public statement regarding HMDA implementation: Recognizing the impending January 1, 2018 effective date of the Bureau’s amendments to Regulation C and the significant systems and operational challenges needed to adjust to the revised regulation, for HMDA data collected in 2018 and reported in 2019 the Bureau does not intend to require data resubmission unless data errors are material. Furthermore, the Bureau does not intend to assess penalties with respect to errors in data collected in 2018 and reported in 2019. Collection and submission of the 2018 HMDA data will provide financial institutions an opportunity to identify any gaps in their implementation of amended Regulation C and make improvements in their HMDA compliance management systems for future years. Any examinations of 2018 HMDA data will be diagnostic to help institutions 40 Consumer Financial Protection Bureau, Home Mortgage Disclosure (Regulation C) Final Rule, https://www.consumerfinance.gov/policycompliance/rulemaking/final-rules/regulation-chome-mortgage-disclosure-act/. 41 Disclosure of Loan-Level HMDA Data, http:// files.consumerfinance.gov/f/documents/201709_ cfpb_hmda-disclosure-policy-guidance.pdf. 42 Consumer Financial Protection Bureau, CFPB Issues Public Statement On Home Mortgage Disclosure Act Compliance, (December 21, 2017), https://www.consumerfinance.gov/about-us/ newsroom/cfpb-issues-public-statement-homemortgage-disclosure-act-compliance/. VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 identify compliance weaknesses and will credit good faith compliance efforts. The Bureau intends to engage in a rulemaking to reconsider various aspects of the 2015 HMDA Rule such as the institutional and transactional coverage tests and the rule’s discretionary data points. For data collected in 2017, financial institutions will submit their reports in 2018 in accordance with the current Regulation C using the Bureau’s HMDA Platform.43 5.2 ECOA and Regulation B On March 24, 2017, the Bureau issued a proposed rule seeking comment on amendments to Regulation B providing creditors additional flexibility in complying with Regulation B in order to facilitate compliance with Regulation C, adding certain model forms and removing others from Regulation B, and making various other amendments to Regulation B and its commentary to facilitate the collection and retention of information about the ethnicity, sex, and race of certain mortgage applicants.44 After considering the comments received, the Bureau issued a final rule on September 20, 2017, amending Regulation B.45 On November 20, 2017, the Bureau issued an official approval pursuant to section 706(e) of ECOA of the final redesigned Uniform Residential Loan Application that included a question asking applicant language preference.46 Bureau staff determined that the final redesigned URLA is in compliance with Regulation B § 1002.5(b) through (d), which provide rules regarding requests for information.47 43 CFPB Issues Public Statement On Home Mortgage Disclosure Act Compliance (December 21, 2017), https://www.consumerfinance.gov/about-us/ newsroom/cfpb-issues-public-statement-homemortgage-disclosure-act-compliance/. 44 Proposed Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and Race Information Collection, https://s3.amazonaws.com/ files.consumerfinance.gov/f/documents/201703_ cfpb_NPRM-to-amend-Regulation-B.pdf. 45 Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and Race Information Collection, https://www.consumerfinance.gov/ policy-compliance/rulemaking/final-rules/ amendments-equal-credit-opportunity-actregulation-b-ethnicity-and-race-informationcollection/. 46 Consumer Financial Protection Bureau, Final Redesigned Uniform Residential Loan Application Status under Regulation B, (Nov. 20, 2017), https:// s3.amazonaws.com/files.consumerfinance.gov/f/ documents/cfpb_urla-language-preferencequestion_bureau-official-approval_112017.pdf. 47 Regulation B § 1002.5(b) provides rules concerning requests for information about race, color, religion, national origin, or sex. Section 1002.5(c) provides rules concerning requests for information about a spouse or former spouse. Section 1002.5(d) provides rules concerning requests for information regarding marital status; PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 5.3 Small Business Data Collection Section 1071 of the Dodd-Frank Act amends ECOA to require financial institutions to collect, report, and make public certain information concerning credit applications made by womenowned, minority-owned, and small businesses. The amendments to ECOA made by the Dodd-Frank Act require that specific data be collected, maintained, and reported, including but not limited to the type of loan applied for, the amount of credit applied for, the type of action taken with regard to each application, the census tract of the principal place of business of the loan applicant, and the race, sex, and ethnicity of the principal owners of the business. The Dodd-Frank Act also provides authority for the Bureau to require any additional data that the Bureau determines would aid in fulfilling the purposes of section 1071. The Bureau issued a Request for Information in 2017 seeking public comment on, among other things, the types of credit products offered and the types of data currently collected by small business lenders and the potential complexity, cost of, and privacy issues related to, small business lending data collection. The information received will help the Bureau determine how to implement efficiently the Dodd-Frank Act’s mandate regarding small business lending data reporting, while minimizing burdens on lenders. 5.4 Amicus Program The Bureau’s Amicus Program files amicus, or friend-of-the-court, briefs in court cases concerning the Federal consumer financial protection laws that the Bureau is charged with implementing, including ECOA. These amicus briefs provide the courts with Bureau views on significant consumer financial protection issues and help ensure that consumer financial protection statutes and regulations are correctly and consistently interpreted by the courts. On September 13, 2017, the Bureau filed an amicus brief in Regions Bank v. Legal Outsource PA, in the United States Court of Appeals for the Eleventh Circuit.48 This case involves claims under ECOA against a bank that allegedly required a business owner’s spouse to guarantee a loan to the business because of the fact that the business owner was married. The income from alimony, child support, or separate maintenance; and childbearing or childrearing. 48 A copy of the Bureau’s amicus brief is available on its amicus web page, https:// www.consumerfinance.gov/policy-compliance/ amicus/briefs/regions-bank-v-legal-outsource-pa/. E:\FR\FM\08FEN1.SGM 08FEN1 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices Bureau filed an amicus brief arguing that the district court erred in rejecting claims by the business and various guarantors of the loan. First, the brief argued that a business entity can state a claim for ECOA discrimination based on its owner’s marital status. Second, the brief argued that regulations issued pursuant to ECOA reasonably interpret the term ‘‘applicant’’ to encompass guarantors such that non-borrowers who are required to guarantee their spouse’s loans can state claims for marital-status discrimination. amozie on DSK3GDR082PROD with NOTICES1 5.5 No-Action Letter In 2017, the Bureau maintained a ‘‘No Action Letter’’ policy 49 that allowed companies to apply for a statement from Bureau staff regarding an innovative product or service that offers the potential for significant consumer benefit where there is substantial uncertainty about whether or how specific provisions of law would be applied. A no-action letter issued pursuant to that policy would advise a recipient that staff has no present intention to recommend initiation of an enforcement or supervisory action with respect to the specific matter. On September 14, 2017, Bureau staff issued its first no-action letter to Upstart Network, Inc., a company that uses alternative data in making credit and pricing decisions.50 The Bureau’s noaction letter stated that Bureau staff had no present intention to recommend initiation of an enforcement or supervisory action against Upstart with regard to application of ECOA and Regulation B. The letter applies to Upstart’s automated model for underwriting applicants for unsecured non-revolving credit, as that model is described in the company’s application materials. The letter is specific to the facts and circumstances of Upstart and does not serve as an endorsement of the use of any particular variables or modeling techniques in credit underwriting. Upstart Network, Inc. is based in San Carlos, California, and provides an online lending platform for consumers to apply for personal loans, including credit card refinancing, student loans, and debt consolidation. Upstart evaluates consumer loan applications using traditional factors such as credit 49 See proposed policy at: https:// www.consumerfinance.gov/policy-compliance/ notice-opportunities-comment/archive-closed/ proposed-policy-on-no-action-letters/. 50 CFPB Announces First No-Action Letter to Upstart Network, Consumer Financial Protection Bureau (Sept. 14, 2017), https:// www.consumerfinance.gov/about-us/newsroom/ cfpb-announces-first-no-action-letter-upstartnetwork/. VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 score and income, as well as incorporating non-traditional sources of data such as education and employment history. Under the terms of the no-action letter, Upstart will share certain information with the Bureau regarding the loan applications it receives, how it decides which loans to approve, and how it will mitigate risk to consumers, as well as information on how its model expands access to credit for traditionally-underserved populations. The Bureau expects that this information will further its understanding of the use of alternative data in credit decision-making. The Upstart no-action letter was part of the Bureau’s continued exploration in 2017 of innovation through the use of alternative data to help expand responsible and fair credit access for consumers who are credit invisible or lack sufficient credit history to provide them traditional access to credit markets. 6. Interagency Coordination 6.1 Interagency Coordination and Engagement The Office of Fair Lending regularly coordinates the Bureau’s fair lending regulatory, supervisory, and enforcement activities with those of other Federal agencies and State regulators to promote consistent, efficient, and effective enforcement of Federal fair lending laws.51 Through our interagency engagement, we work to address current and emerging fair lending risks. On August 22, 2017, the FFIEC agencies announced new HMDA Examiner Transaction Testing Guidelines (Guidelines).52 The new Guidelines were accompanied by the release of a blog post by the Bureau.53 The Guidelines represent a joint effort led by the Bureau, together with the FDIC, the FRB, the NCUA, and the OCC to provide—for the first time—uniform guidelines across all Federal HMDA supervisory agencies. This collaboration began with the Bureau issuing a Request 51 Dodd-Frank Act section 1013(c)(2)(B) (codified at 12 U.S.C. 5493(c)(2)(B)). 52 FFIEC HMDA Examiner Transaction Testing Guidelines, https://s3.amazonaws.com/ files.consumerfinance.gov/f/documents/201708_ cfpb_ffiec-hmda-examiner-transaction-testingguidelines.pdf. 53 Tim Lambert & Eric Wang, Here’s what you need to know about the new FFIEC HMDA Examiner Transaction Testing Guidelines, Consumer Financial Protection Bureau (Aug. 22, 2017), https://www.consumerfinance.gov/about-us/ blog/heres-what-you-need-know-about-new-ffiechmda-examiner-transaction-testing-guidelines/. PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 2831 for Information 54 and holding outreach meetings in which the other supervisory agencies participated. The agencies then worked together to develop the Guidelines. The Bureau, along with the FTC, DOJ, HUD, FDIC, FRB, NCUA, OCC, and the Federal Housing Finance Agency, comprise the Interagency Task Force on Fair Lending. The Task Force meets regularly to discuss fair lending enforcement efforts, share current methods of conducting supervisory and enforcement fair lending activities, and coordinate fair lending policies. The Bureau belongs to a standing working group of Federal agencies— with the DOJ, HUD, and FTC—that meets regularly to discuss issues relating to fair lending enforcement. These agencies constitute the Interagency Working Group on Fair Lending Enforcement. The agencies use these meetings to discuss fair lending developments and trends, methodologies for evaluating fair lending risks and violations, and coordination of fair lending enforcement efforts. In addition to these interagency working groups, we meet periodically and on an ad hoc basis with the Justice Department and prudential regulators to coordinate our fair lending work. In 2017, the Bureau chaired the FFIEC HMDA/Community Reinvestment Act Data Collection Subcommittee, a subcommittee of the FFIEC Task Force on Consumer Compliance (Task Force), that oversees FFIEC projects and programs involving HMDA data collection and dissemination, the preparation of the annual FFIEC budget for processing services, and the development and implementation of other related HMDA processing projects as directed by the Task Force. 7. Outreach: Promoting Fair Lending Compliance and Education Pursuant to Dodd-Frank,55 the Office of Fair Lending regularly engages in outreach with industry, bar associations, consumer advocates, civil rights organizations, academia, and other government agencies, to help educate and inform our stakeholders about fair lending as well as learn about emerging trends or products that pose fair lending risk. The Bureau is committed to communicating directly with all stakeholders on its policies, compliance expectations, and fair lending priorities, and to receiving valuable input on fair 54 Request for Info. Regarding Home Mortgage Disclosure Act Resubmission Guidelines, 81 FR 1,405 (Jan. 12, 2016), https://www.gpo.gov/fdsys/ pkg/FR-2016-01-12/pdf/2016-00442.pdf. 55 Dodd-Frank Act section 1013(c)(2)(C) (codified at 12 U.S.C. 5493(c)(2)(C)). E:\FR\FM\08FEN1.SGM 08FEN1 2832 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices lending issues. Outreach is accomplished through issuance of Reports to Congress, Interagency Statements, Supervisory Highlights, Compliance Bulletins, letters, blog posts, speeches and presentations at conferences and trainings, and participation in meetings to discuss fair lending and access to credit. 7.1 Blog Posts The Bureau regularly uses its blog as a tool to communicate effectively to consumers and other stakeholders on timely issues, emerging areas of concern, Bureau initiatives, and more. In 2017 we published five blog posts related to fair lending topics including: Providing consumers updated information about a fair lending enforcement action,56 announcing the Bureau’s first no-action letter,57 announcing new guidelines on HMDA examiner transaction testing,58 issuing an official approval of the final redesigned Uniform Residential Loan Application,59 and noting the release of the fair lending annual report on 2016 activities.60 The blog posts may be accessed at www.consumerfinance.gov/blog. 7.2 Supervisory Highlights Supervisory Highlights reports anchor the Bureau’s efforts to communicate about the Bureau’s supervisory activity. More information about the topics discussed this year in Supervisory Highlights can be found in Section 3.1 of this Report. As with all Bureau resources, all editions of Supervisory Highlights are available on www.consumerfinance.gov/reports. 7.3 Speaking Engagements & Roundtables Staff from the Bureau’s Office of Fair Lending and Equal Opportunity participated in a number of outreach speaking events and roundtables throughout 2017 to further the Bureau’s mission of educating and informing stakeholders about fair lending and receiving input from stakeholders. In these events, staff shared information on fair lending priorities, emerging issues, and heard feedback from stakeholders on Bureau fair-lending work. Some examples of the topics covered include fair lending priorities, fair lending modeling and governance, redlining, HMDA, small business lending, alternative data, and installment lending contracts. APPENDIX A: DEFINED TERMS Term Definition AMS .......................................................... Bureau ....................................................... CMS .......................................................... CRA ........................................................... Dodd-Frank Act ......................................... DOJ ........................................................... DOT ........................................................... ECOA ........................................................ FCA ........................................................... FDIC .......................................................... Federal Reserve Board ............................. FFIEC ........................................................ Agricultural Marketing Service of the U.S. Department of Agriculture. The Bureau of Consumer Financial Protection. Compliance Management System. Community Reinvestment Act. The Dodd-Frank Wall Street Reform and Consumer Protection Act. The U.S. Department of Justice. The U.S. Department of Transportation. The Equal Credit Opportunity Act. Farm Credit Administration. The U.S. Federal Deposit Insurance Corporation. The U.S. Board of Governors of the Federal Reserve System. The U.S. Federal Financial Institutions Examination Council—the FFIEC member agencies are the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Bureau of Consumer Financial Protection (BCFP). The State Liaison Committee was added to FFIEC in 2006 as a voting member. The U.S. Board of Governors of the Federal Reserve System. The U.S. Federal Trade Commission. Grain Inspection, Packers and Stockyards Administration (GIPSA) of the U.S. Department of Agriculture. The Home Mortgage Disclosure Act. The U.S. Department of Housing and Urban Development. The National Credit Union Administration. The U.S. Office of the Comptroller of the Currency. Small Business Administration. U.S. Securities and Exchange Commission. U.S. Department of Agriculture. FRB ........................................................... FTC ........................................................... GIPSA ....................................................... HMDA ........................................................ HUD .......................................................... NCUA ........................................................ OCC .......................................................... SBA ........................................................... SEC ........................................................... USDA ........................................................ [2]. Regulatory Requirements amozie on DSK3GDR082PROD with NOTICES1 This Fair Lending Report of the Bureau of Consumer Financial Protection summarizes existing 56 Patrice Alexander Ficklin, African-American and Hispanic borrowers harmed by Provident will receive $9 million in compensation, Consumer Financial Protection Bureau (Nov. 2, 2017), https:// www.consumerfinance.gov/about-us/blog/africanamerican-and-hispanic-borrowers-harmedprovident-will-receive-9-million-compensation/. 57 Patrice Alexander Ficklin and Dan Quan, Supporting consumer-friendly innovation: Announcing our first no-action letter, Consumer Financial Protection Bureau (Sept. 14, 2017), https://www.consumerfinance.gov/about-us/blog/ VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 requirements under the law, and summarizes findings made in the course of exercising the Bureau’s supervisory and enforcement authority. It is therefore exempt from notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b). Because no supporting-consumer-friendly-innovationannouncing-our-first-no-action-letter/. 58 Tim Lambert & Eric Wang, Here’s what you need to know about the new FFIEC HMDA Examiner Transaction Testing Guidelines, Consumer Financial Protection Bureau (Aug. 22, 2017), https://www.consumerfinance.gov/about-us/ blog/heres-what-you-need-know-about-new-ffiechmda-examiner-transaction-testing-guidelines/. 59 J. Frank Vespa-Papaleo, Identification of language preference on the Uniform Residential Loan Application, Consumer Financial Protection Bureau (Nov. 20, 2017), https:// www.consumerfinance.gov/about-us/blog/ identification-language-preference-uniformresidential-loan-application/. 60 Patrice Alexander Ficklin, Safeguarding against credit discrimination: 2016 Fair Lending Report (April 14, 2017), https:// www.consumerfinance.gov/about-us/blog/ safeguarding-against-credit-discrimination-2016fair-lending-report/. PO 00000 Frm 00026 Fmt 4703 Sfmt 4703 E:\FR\FM\08FEN1.SGM 08FEN1 Federal Register / Vol. 84, No. 27 / Friday, February 8, 2019 / Notices notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a). The Bureau has determined that this Fair Lending Report does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. Dated: February 1, 2019. Kathleen L. Kraninger, Director, Bureau of Consumer Financial Protection. COMMUNICATIONS,’’ filed May 18, 2011, and issued January 5, 2016. The Department of the Air Force may grant the prospective license unless a timely objection is received that sufficiently shows the grant of the license would be inconsistent with the Bayh-Dole Act or implementing regulations. A competing application for a patent license agreement, completed in compliance with 35 U.S.C. 209; 37 CFR 404.8 and received by the Air Force within the period for timely objections, will be treated as an objection and may be considered as an alternative to the proposed license. [FR Doc. 2019–01568 Filed 2–7–19; 8:45 am] Henry Williams, Acting Air Force Federal Register Liaison Officer. BILLING CODE 4810–AM–P [FR Doc. 2019–01590 Filed 2–7–19; 8:45 am] BILLING CODE 5001–10–P DEPARTMENT OF DEFENSE DEPARTMENT OF DEFENSE Department of the Air Force Department of the Army Notice of Intent To Grant an Exclusive Patent License Department of the Air Force, Department of Defense. ACTION: Notice of Intent. Proposed Collection; Comment Request Pursuant to the Bayh-Dole Act and implementing regulations, the Department of the Air Force hereby gives notice of its intent to grant an exclusive patent license agreement to VyrticalXpress LLC, a corporation of the State of Ohio, having a place of business at 5200 Springfield Road, Suite 300, Dayton, Ohio 45431. DATES: Written objections must be filed no later than fifteen (15) calendar days after the date of publication of this Notice. ACTION: AGENCY: Submit written objections to the Air Force Materiel Command Law Office, AFMCLO/JAZ, 2240 B Street, Room 260, Wright-Patterson AFB, OH 45433–7109; Facsimile: (937) 255–3733; or Email: afmclo.jaz.tech@us.af.mil. Include Docket No. ARH–190107B–PL in the subject line of the message. FOR FURTHER INFORMATION CONTACT: Air Force Materiel Command Law Office, AFMCLO/JAZ, 2240 B Street, Rm. 260, Wright-Patterson AFB, OH 45433–7109; Facsimile: (937) 255–3733; Email: afmclo.jaz.tech@us.af.mil. SUPPLEMENTARY INFORMATION: The Department of the Air Force intends to grant an exclusive patent license agreement for the invention described in: —U.S. Patent No. 9,230,549, entitled, ‘‘MULTI-MODAL ADDRESSES: VerDate Sep<11>2014 17:18 Feb 07, 2019 Jkt 247001 Department of the Army, DoD. Information collection notice. AGENCY: SUMMARY: amozie on DSK3GDR082PROD with NOTICES1 [Docket ID: USA–2019–HQ–0004] In compliance with the Paperwork Reduction Act of 1995, the Department of the Army announces a proposed public information collection and seeks public comment on the provisions thereof. Comments are invited on: Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the agency’s estimate of the burden of the proposed information collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology. DATES: Consideration will be given to all comments received by April 9, 2019. ADDRESSES: You may submit comments, identified by docket number and title, by any of the following methods: Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. Mail: Department of Defense, Office of the Chief Management Officer, Directorate for Oversight and Compliance, 4800 Mark Center Drive, SUMMARY: PO 00000 Frm 00027 Fmt 4703 Sfmt 4703 2833 Mailbox #24, Suite 08D09, Alexandria, VA 22350–1700. Instructions: All submissions received must include the agency name, docket number and title for this Federal Register document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the internet at http:// www.regulations.gov as they are received without change, including any personal identifiers or contact information. FOR FURTHER INFORMATION CONTACT: To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Department of the Army, Military Surface Deployment and Distribution Command, 1 Soldier Way, Scott AFB IL 62225–5006, ATTN: Mr. J.D. Ranbarger, or call Department of the Army Reports Clearance Officer at (703) 428–6440. SUPPLEMENTARY INFORMATION: Title; Associated Form; and OMB Number: Department of Defense Standard Tender of Freight Services; SDDC Form 364–R; OMB Control Number 0704–0261. Needs and Uses: The information derived from the DoD tenders on file with the Military Surface Deployment and Distribution Command (SDDC) is used by SDDC subordinate commands and DoD shippers to select the best value carriers to transport surface freight shipments. Freight carriers furnish information in a uniform format so that the Government can determine the cost of transportation, accessorial, and security services, and select the best value carriers for 1.1 million Bill of Lading shipments annually. The DoD tender is the source document for the General Services Administration postshipment audit of carrier freight bills. Affected Public: Business or other forprofit. Annual Burden Hours: 27,351. Number of Respondents: 82,053. Responses per Respondent: 1. Annual Responses: 82,053. Average Burden per Response: 20 minutes. Frequency: On occasion. The DoD tender format was developed to take advantage of improved information collection technology and to connect with ongoing initiatives to implement automated systems to file tenders, select carriers, quote rates, and audits. The disciplined data fields of the tenders will facilitate the Electronic Data Interchange of tender data between carriers and SDDC, also between SDDC E:\FR\FM\08FEN1.SGM 08FEN1

Agencies

[Federal Register Volume 84, Number 27 (Friday, February 8, 2019)]
[Notices]
[Pages 2824-2833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01568]


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BUREAU OF CONSUMER FINANCIAL PROTECTION


Fair Lending Report of the Bureau of Consumer Financial 
Protection, December 2018

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Fair Lending Report of the Bureau of Consumer Financial 
Protection.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing its sixth Fair Lending Report of the Bureau of Consumer 
Financial Protection (Fair Lending Report) to Congress. The Bureau is 
committed to ensuring fair access to credit and eliminating 
discriminatory lending practices. This report describes the Bureau's 
fair lending activities in prioritization, supervision, enforcement, 
rulemaking, interagency coordination, and outreach for calendar year 
2017.

DATES: The Bureau released the December 2018 Fair Lending Report on its 
website on December 4, 2018.

FOR FURTHER INFORMATION CONTACT: Anita Visser, Senior Policy Advisor to 
the Director of Fair Lending, Office of Fair Lending and Equal 
Opportunity, at 1-855-411-2372. If you require this document in an 
alternative electronic format, please contact 
CFPB_Accessibility@cfpb.gov.

SUPPLEMENTARY INFORMATION: 

1. Fair Lending Report of the Bureau of Consumer Financial Protection, 
December 2018

Message from Mick Mulvaney, Acting Director

    This Fair Lending Report of the Bureau of Consumer Financial 
Protection describes the Bureau's fair lending activities for 2017, 
consistent with its statutory mandate to ensure that consumers are 
protected from discrimination (12 U.S.C. 5511(b)(2)). These efforts 
included:
     Providing oversight and enforcement of Federal laws 
intended to ensure the fair, equitable, and nondiscriminatory access to 
credit for both individuals and communities that are enforced by the 
Bureau, including the Equal Credit Opportunity Act (ECOA) \1\ and the 
Home Mortgage Disclosure Act (HMDA); \2\
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    \1\ 15 U.S.C. 1691 et seq.
    \2\ 12 U.S.C. 2801 et seq.
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     Coordinating fair lending efforts of the Bureau with other 
Federal agencies and State regulators, as appropriate, to promote 
consistent, efficient, and effective enforcement of Federal fair 
lending laws; and
     Working with private industry, fair lending, civil rights, 
consumer and community advocates on the promotion of fair lending 
compliance and education.
    This report fulfills the Bureau's statutory responsibility to, 
among other things, report annually to Congress on public enforcement 
actions taken by other agencies with administrative enforcement 
responsibilities under ECOA, and assessments of the extent to which 
compliance with ECOA has been achieved (15 U.S.C. 1691f). It also 
fulfills the statutory requirement that the Bureau, in consultation 
with HUD, report annually on the utility of HMDA's requirement that 
covered lenders itemize certain mortgage loan data (12 U.S.C. 2807).

Sincerely,

Mick Mulvaney,
Message from Patrice Alexander Ficklin
Director, Office of Fair Lending and Equal Opportunity.

    In 2017, the Office of Fair Lending and Equal Opportunity completed 
its sixth full year of stewardship over the Bureau's efforts to fulfill 
its fair lending mandate. 2017 was distinguished as a year in which the 
Office continued to focus on promoting fair, equitable and 
nondiscriminatory access to credit in mortgage lending, deepened its 
supervisory work in servicing and small business lending, and embarked 
on new efforts to encourage innovation in expanding credit access.
    Mortgage lending remained a priority for the Bureau's fair lending 
supervisory and enforcement activity, focusing on redlining, 
underwriting, pricing, steering, servicing and HMDA data integrity. The 
Bureau announced a significant HMDA enforcement action in 2017, 
reinforcing the importance of the legal requirement that covered 
mortgage lenders must report accurate data about mortgage transactions. 
HMDA data is a critical component of the effective enforcement of fair 
lending laws.
    Beyond mortgages, we know that other lending markets play a vital 
role in allowing consumers to fully participate as stakeholders in our 
economy, strengthening our communities, and expanding opportunities to 
build wealth for businesses and consumers alike. In 2017, the Bureau 
announced an enforcement action addressing discrimination in the terms 
and conditions of credit cards, and conducted significant fair lending 
supervisory activity in student loan servicing and small business 
lending.
    The Office continued to partner with colleagues across the Bureau 
in outreach to support innovation that promotes ``fair, equitable, and 
nondiscriminatory access to credit for both individuals and 
communities,'' culminating in the Bureau's issuance of its first no-
action letter (NAL) to Upstart Network, Inc., a company that uses 
alternative data in making credit and pricing decisions. I led the 
Bureau's engagement with Upstart, in furtherance of our interest in 
exploring methods of achieving fair lending compliance in conjunction 
with the use of alternative data and the potential benefits of such 
data in expanding credit access.
    As 2017 drew to a close, the Office welcomed Acting Director Mick 
Mulvaney, and began work to implement his commitment to enforce the 
fair lending laws under the Bureau's jurisdiction.
    I am proud of the Office's work not only in 2017, but also 
throughout its history in fulfilling its Dodd-Frank mandate to protect 
America's consumers from lending discrimination and promote credit 
access. To that end, I am excited to share our progress with this, our 
sixth, Fair Lending Report.\3\
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    \3\ See Dodd-Frank Act section 1013(c)(2)(D) (codified at 12 
U.S.C. 5493(c)(2)(D)).

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Sincerely,

Patrice Alexander Ficklin

Executive Summary

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank or Dodd-Frank Act) \4\ established the Office of Fair 
Lending and Equal Opportunity (the Office of Fair Lending) within the 
Bureau, and vested it with such powers and duties as the Bureau's 
Director may delegate to it, including:
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    \4\ Public Law 111-203, 124 Stat. 1376 (2010).
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    (A) Providing oversight and enforcement of Federal laws intended to 
ensure the fair, equitable, and nondiscriminatory access to credit for 
both individuals and communities that are enforced by the Bureau, 
including the Equal Credit Opportunity Act and the Home Mortgage 
Disclosure Act;
    (B) Coordinating fair lending efforts of the Bureau with other 
Federal agencies and State regulators, as appropriate, to promote 
consistent, efficient, and

[[Page 2825]]

effective enforcement of Federal fair lending laws;
    (C) Working with private industry, fair lending, civil rights, 
consumer and community advocates on the promotion of fair lending 
compliance and education; and
    (D) Providing annual reports to Congress on the efforts of the 
Bureau to fulfill its fair lending mandate.\5\
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    \5\ Dodd-Frank Act section 1013(c)(2)(A), (B) and (C) (codified 
at 12 U.S.C. 5493(c)(2)(A), (B), and (C)).
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    The law also requires the Bureau to file an annual report to 
Congress describing the administration of its functions under the Equal 
Credit Opportunity Act (ECOA), summarizing public enforcement actions 
taken by other agencies with administrative enforcement 
responsibilities under ECOA, and providing an assessment of the extent 
to which compliance with ECOA has been achieved.\6\ In addition, the 
law requires the Bureau, in consultation with U.S. Department of 
Housing and Urban Development (HUD), to report annually on the utility 
of the Home Mortgage Disclosure Act's (HMDA) requirement that covered 
lenders itemize certain mortgage loan data.\7\ This report to Congress 
from the Office of Fair Lending is intended to fulfill those 
requirements and report on the Bureau's efforts to fulfill its fair 
lending mandate during calendar year 2017.\8\
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    \6\ 15 U.S.C. 1691f.
    \7\ 12 U.S.C. 2807.
    \8\ See Dodd-Frank Act section 1013(c)(2)(D), Public Law 111-
203, 124 Stat. 1376 (2010) (codified at 12 U.S.C. 5493(c)(2)(D)).
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1. Interagency Reporting on ECOA and HMDA

    The law requires the Bureau to file a report to Congress annually 
describing the administration of its functions under ECOA, summarizing 
public enforcement actions taken by other agencies with administrative 
enforcement responsibilities under ECOA, and providing an assessment of 
the extent to which compliance with ECOA has been achieved.\9\ In 
addition, the Bureau's annual HMDA reporting requirement calls for the 
Bureau, in consultation with HUD, to report annually on the utility of 
HMDA's requirement that covered lenders itemize certain mortgage loan 
data.\10\
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    \9\ 15 U.S.C. 1691f.
    \10\ 12 U.S.C. 2807.
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1.1 ECOA Enforcement

    The enforcement efforts and compliance assessments made by all the 
agencies assigned enforcement authority under section 704 of ECOA are 
discussed in this section.
1.1.1 Public Enforcement Actions
    In addition to the Bureau, the agencies charged with administrative 
enforcement of ECOA under section 704 include: The Federal Deposit 
Insurance Corporation (FDIC), the Federal Reserve Board (FRB), the 
National Credit Union Administration (NCUA), and the Office of the 
Comptroller of the Currency (OCC), (collectively, the Federal Financial 
Institutions Examination Council (FFIEC) agencies); \11\ Agricultural 
Marketing Service (AMS) of the U.S. Department of Agriculture 
(USDA),\12\ the Department of Transportation (DOT), the Farm Credit 
Administration (FCA), the Federal Trade Commission (FTC), the 
Securities and Exchange Commission (SEC), and the Small Business 
Administration (SBA).\13\
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    \11\ The FFIEC is a ``formal interagency body empowered to 
prescribe uniform principles, standards, and report forms for the 
Federal examination of financial institutions'' by the member 
agencies listed above and the State Liaison Committee ``and to make 
recommendations to promote uniformity in the supervision of 
financial institutions.'' Federal Financial Institutions Examination 
Council, http://www.ffiec.gov (last visited April 5, 2018). The 
FFIEC member agencies are the Board of Governors of the Federal 
Reserve System (FRB), the Federal Deposit Insurance Corporation 
(FDIC), the National Credit Union Administration (NCUA), the Office 
of the Comptroller of the Currency (OCC), and the Bureau of Consumer 
Financial Protection (Bureau). The State Liaison Committee was added 
to FFIEC in 2006 as a voting member.
    \12\ The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) was eliminated as a stand-alone agency within USDA in 2017. 
The functions previously performed by GIPSA have been incorporated 
into the Agricultural Marketing Service (AMS), and ECOA reporting 
now comes from the Packers and Stockyards Division, Fair Trade 
Practices Program, AMS.
    \13\ 15 U.S.C. 1691c.
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    In 2017, the Bureau brought one public enforcement action for 
violations of ECOA, and the other agencies reported that they brought 
no public enforcement actions related to ECOA in 2017.
1.1.2 Violations Cited During ECOA Examinations
    Among institutions examined for compliance with ECOA and Regulation 
B, the FFIEC agencies reported that the most frequently-cited 
violations were:

     Table 1--Regulation B Violations Cited by FFIEC Agencies: 2017
------------------------------------------------------------------------
                                                        Regulation B
             FFIEC Agencies reporting                 violations: 2017
------------------------------------------------------------------------
The Bureau, FDIC, FRB, NCUA, OCC..................  12 CFR 1002.4(a):
                                                     Discrimination on a
                                                     prohibited basis in
                                                     a credit
                                                     transaction.
                                                    12 CFR 1002.5(b):
                                                     Improperly
                                                     inquiring about the
                                                     race, color,
                                                     religion, national
                                                     origin, or sex of
                                                     an applicant or any
                                                     other person in
                                                     connection with a
                                                     credit transaction.
                                                    12 CFR 1002.7(d)(1),
                                                     (d)(6): Improperly
                                                     requiring the
                                                     signature of an
                                                     applicant's spouse
                                                     or other person if
                                                     the applicant
                                                     qualifies under the
                                                     creditor's
                                                     standards of
                                                     creditworthiness
                                                     for the amount and
                                                     terms of the credit
                                                     requested;
                                                     improperly imposing
                                                     requirements upon
                                                     an additional party
                                                     that the creditor
                                                     is prohibited from
                                                     imposing upon an
                                                     applicant.
                                                    12 CFR 1002.9(a)(1),
                                                     (a)(1)(i), (a)(2),
                                                     (b), (b)(2),
                                                     (c)(1)(i): Failure
                                                     to provide notice
                                                     to the applicant 30
                                                     days after
                                                     receiving a
                                                     completed
                                                     application
                                                     concerning the
                                                     creditor's approval
                                                     of, counteroffer or
                                                     adverse action on
                                                     the application;
                                                     failure to provide
                                                     appropriate notice
                                                     to the applicant 30
                                                     days after taking
                                                     adverse action on
                                                     an incomplete
                                                     application;
                                                     failure to provide
                                                     sufficient
                                                     information in an
                                                     adverse action
                                                     notification,
                                                     including the
                                                     specific reasons
                                                     for the action
                                                     taken.
                                                    12 CFR
                                                     1002.12(b)(1):
                                                     Failure to preserve
                                                     records of actions
                                                     taken on an
                                                     application or of
                                                     incompleteness.
                                                    12 CFR
                                                     1002.13(a)(1)(i),
                                                     (b): Failure to
                                                     request information
                                                     on an application
                                                     regarding an
                                                     applicant's
                                                     ethnicity, race,
                                                     sex, marital
                                                     status, and age, or
                                                     note, to the extent
                                                     possible, the
                                                     ethnicity, race,
                                                     and sex of an
                                                     applicant on the
                                                     basis of visual
                                                     observation or
                                                     surname if not
                                                     provided by the
                                                     applicant.
                                                    12 CFR 1002.14(a),
                                                     (a)(2): Failure to
                                                     routinely provide
                                                     an applicant with a
                                                     copy of all
                                                     appraisals and
                                                     other written
                                                     valuations
                                                     developed in
                                                     connection with an
                                                     application for
                                                     credit that is to
                                                     be secured by a
                                                     first lien on a
                                                     dwelling, and/or
                                                     failure to provide
                                                     an applicant with a
                                                     copy of an
                                                     appraisal report
                                                     upon an applicant's
                                                     written request.
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[[Page 2826]]


   Table 2--Regulation B Violations Cited by Other ECOA Agencies: 2017
------------------------------------------------------------------------
                                                        Regulation B
                Other ECOA agencies                   violations: 2017
------------------------------------------------------------------------
FCA...............................................  12 CFR
                                                     1002.9(a)(1)(i):
                                                     Failure to provide
                                                     notice to the
                                                     applicant 30 days
                                                     after receiving a
                                                     completed
                                                     application
                                                     concerning the
                                                     creditor's approval
                                                     of, counteroffer or
                                                     adverse action on
                                                     the application.
                                                    12 CFR 1002.13:
                                                     Failure to request
                                                     and collect
                                                     information for
                                                     monitoring
                                                     purposes.
------------------------------------------------------------------------

    The AMS, the SEC, and the SBA reported that they received no 
complaints based on ECOA or Regulation B in 2017. In 2017, the DOT 
reported that it received a ``small number of consumer inquiries or 
complaints concerning credit matters possibly covered by ECOA,'' which 
it ``processed informally.'' The FTC is an enforcement agency and does 
not conduct compliance examinations.

1.2 Referrals to the Department of Justice

    In 2017, the FFIEC agencies including the Bureau, referred a total 
of 11 ECOA matters involving discrimination in violation of ECOA to the 
Department of Justice (DOJ or Justice Department). The FDIC referred 
four matters to the DOJ involving discrimination in credit transactions 
on the prohibited bases of age, marital status, sex, and national 
origin. The FRB referred three matters to the DOJ involving 
discrimination in credit transactions on the prohibited basis of 
marital status. The NCUA referred two matters to the DOJ involving 
discrimination in credit transactions on the prohibited bases of 
marital status, receipt of public assistance income, and sex. The 
Bureau referred two matters to the DOJ involving discrimination in 
mortgage servicing on the prohibited basis of the receipt of public 
assistance income, and discrimination in credit card account 
management, installment lending, and mortgage servicing on the 
prohibited bases of national origin and race.

1.3 Reporting on the Home Mortgage Disclosure Act

    The Bureau's annual HMDA reporting requirement calls for the 
Bureau, in consultation with HUD, to report annually on the utility of 
HMDA's requirement that covered lenders itemize loan data in order to 
disclose the number and dollar amount of certain mortgage loans and 
applications, grouped according to various characteristics.\14\ The 
Bureau, in consultation with HUD, finds that itemization and tabulation 
of these data further the purposes of HMDA. For more information on 
HMDA and its implementing regulation, Regulation C with regard to 
guidance and rulemaking, please see the Rulemaking section of this 
report (Section 5).\15\
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    \14\ See 12 U.S.C. 2807.
    \15\ For more information on recent developments in HMDA and 
Regulation C, see: https://www.consumerfinance.gov/about-us/newsroom/bureau-consumer-financial-protection-issues-statement-implementation-economic-growth-regulatory-relief-and-consumer-protection-act-amendments-home-mortgage-disclosure-act/.
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2. The Bureau's Fair Lending Prioritization

2.1 Risk-Based Prioritization

    Because Congress charged the Bureau with responsibility for 
overseeing many lenders and products, the Office uses a risk-based 
approach to prioritize supervisory examinations and enforcement 
activity, to help ensure focus on areas that present substantial risk 
of credit discrimination for consumers.
    As part of the prioritization process, the Bureau identifies 
emerging developments and trends by monitoring key consumer financial 
markets. If this market intelligence identifies fair lending risks in a 
particular market that require further attention, that information is 
incorporated into the prioritization process to determine the type and 
extent of attention required to address those risks. For instance, our 
monitoring highlighted potential steering risks in student loan 
servicing, which resulted in the prioritization of this market in our 
supervisory work in 2017.
    The fair lending prioritization process incorporates a number of 
additional factors as well, including: Consumer complaints; tips and 
leads from advocacy groups, whistleblowers, and government agencies; 
supervisory and enforcement history; and results from analysis of HMDA 
and other data.
    Once Fair Lending has evaluated these inputs to prioritize 
institutions, products, and markets based on an assessment of fair 
lending risk posed to consumers, it considers how best to address those 
risks as part of its annual strategic planning process. Potential 
actions include scheduling an institution for a supervisory review, 
opening an enforcement investigation where appropriate, conducting 
further research, policy development, or outreach. Once this strategic 
planning process is complete, we regularly coordinate with other 
regulators so we can inform each other's work, complement each other's 
efforts where appropriate, and reduce burden on subject institutions.
    Risk-based prioritization is an ongoing process, and the Bureau 
continues to receive and evaluate relevant information even after 
priorities are identified. Such information may include new tips and 
leads about specific institutions, consumer complaints, additional 
risks identified in current supervisory and enforcement activities, and 
compliance issues self-identified by institutions. In determining how 
best to address this additional information, Fair Lending considers 
several factors, including (1) the nature and extent of the fair 
lending risk, (2) the degree of consumer harm, and (3) whether the risk 
was self-identified and/or self-reported to the Bureau. It also takes 
account of well-developed fair lending compliance management systems 
\16\ and other responsible conduct as set forth in CFPB Bulletin 2013-
06, Responsible Business Conduct: Self-Policing, Self-Reporting, 
Remediation, and Cooperation.\17\
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    \16\ The Bureau previously has identified common features of a 
well-developed fair lending compliance management system: Consumer 
Financial Protection Bureau, Fair Lending Report of the Consumer 
Financial Protection Bureau at 13-14 (Apr. 2014), http://files.consumerfinance.gov/f/201404_cfpb_report_fair-lending.pdf.
    \17\ Consumer Financial Protection Bureau, Responsible Business 
Conduct: Self-Policing, Self-Reporting, Remediation, and 
Cooperation, CFPB Bulletin 2013-06 (June 25, 2013), http://files.consumerfinance.gov/f/201306_cfpb_bulletin_responsible-conduct.pdf.
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2.2 Fair Lending Priorities

    As a result of its annual risk-based prioritization analyses, in 
2017 the Bureau focused on: \18\
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    \18\ Patrice Ficklin, Fair Lending priorities in the new year, 
Consumer Financial Protection Bureau (Dec. 16, 2016), http://www.consumerfinance.gov/about-us/blog/fair-lending-priorities-new-year/.
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     Redlining: Whether lenders intentionally discouraged 
prospective applicants in minority neighborhoods from applying for 
credit.
     Mortgage and Student Loan Servicing: Whether some 
borrowers who were behind on their mortgage or student loan payments 
may have been negatively impacted in their ability to

[[Page 2827]]

work out a new solution with the servicer because of their race, 
ethnicity, sex, or age.
     Small Business Lending: Whether institutions are complying 
with the Congressional mandate to not discriminate on a prohibited 
basis in small business lending. Focus in this area includes improving 
Bureau understanding of: Small business lending credit processes; 
existing data collection processes; and the nature, extent, and 
management of fair lending risk in small business lending. Congress 
required the Bureau to promulgate a regulation governing small business 
loan data collection in order to ``facilitate enforcement of fair 
lending laws and enable communities, governmental entities, and 
creditors to identify business and community development needs and 
opportunities of women-owned, minority-owned, and small businesses.'' 
\19\ Small business lending supervisory activity has helped expand and 
enhance the Bureau's knowledge in this area, including the credit 
process; existing data collection processes; and the nature, extent, 
and management of fair lending risk.
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    \19\ See Dodd-Frank Act, Public Law 111-203, sec. 1071, 704B(a).
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     The Bureau remains committed to ensuring that consumers 
are protected from discrimination in all credit markets under its legal 
authority.

3. Fair Lending Supervision

    The Bureau's Fair Lending Supervision program assesses compliance 
with ECOA and HMDA at banks and nonbanks over which the Bureau has 
supervisory authority. Supervision activities in 2017 ranged from 
assessments of institutions' fair lending compliance management systems 
to in-depth reviews of products or activities that may pose heightened 
fair lending risks to consumers. As part of its Fair Lending 
Supervision program, the Bureau conducted three types of fair lending 
reviews: ECOA baseline reviews, ECOA targeted reviews, and HMDA data 
integrity reviews.
    As a general matter, if such a review finds that an institution's 
fair lending compliance is inadequate, the Bureau communicates its 
supervisory expectations to the institution to help the institution 
establish fair lending compliance programs commensurate with the size 
and complexity of the institution and its lines of business.\20\ 
Institutions may provide remediation and restitution to consumers in 
response to violations of fair lending laws identified in the review, 
and the Bureau may pursue other appropriate relief. The Bureau also 
refers matters to the Justice Department when it has reason to believe 
that a creditor has engaged in a pattern or practice of lending 
discrimination in violation of ECOA.\21\ The Bureau also may refer 
other potential ECOA violations to the Justice Department.\22\
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    \20\ For recent updates to the types of supervisory 
communications, see https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_bulletin-2018-01_changes-to-supervisory-communications.pdf.
    \21\ 15 U.S.C. 1691e(g).
    \22\ Id.
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3.1 Fair Lending Supervisory Observations

    The Bureau published results of certain 2017 supervisory exams in 
Supervisory Highlights. Those findings are also summarized below.
3.1.1 Update to Proxy Methodology
    The Spring 2017 edition of Supervisory Highlights,\23\ published in 
April 2017, discussed updates to the Bayesian Improved Surname 
Geocoding (BISG) proxy methodology for race and ethnicity,\24\ which 
relies in part on publically available information from the Census. In 
December 2016, the U.S. Census Bureau released a list of the most 
frequently-occurring surnames based on the most recent census, which 
includes values for total counts and race and ethnicity shares 
associated with each surname. In total, the list provides information 
on the 162,253 surnames that appear at least 100 times in the most 
recent census, covering approximately 90% of the population.\25\ In 
April 2017, examination teams began relying on an updated proxy 
methodology that reflected the newly available surname data from the 
Census Bureau.\26\
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    \23\ Consumer Financial Protection Bureau, Supervisory 
Highlights Spring 2017 at 14-15 (April 26, 2017), https://www.consumerfinance.gov/documents/4608/201704_cfpb_Supervisory-Highlights_Issue-15.pdf.
    \24\ For more information on the Bureau's use of BISG in 2017 
and previously, see Consumer Financial Protection Bureau, 
Supervisory Highlights Summer 2014 at 10-13 (September 17, 2014), 
http://files.consumerfinance.gov/f/201409_cfpb_supervisory-highlights_auto-lending_summer-2014.pdf.
    \25\ The surname data are available on the Census Bureau's 
website, see Frequently Occurring Surnames from the 2010 Census 
(last revised December 27, 2016), https://www.census.gov/topics/population/genealogy/data/2010_surnames.html.
    \26\ The new surname list; statistical software code, written in 
Stata; and other publicly available data used to build the BISG 
proxy are available at: https://github.com/cfpb/proxy-methodology.
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3.1.2 Mortgage Servicing
    The Summer 2017 edition of Supervisory Highlights \27\ reported on 
the Bureau's fair lending work in mortgage servicing. As part of its 
fair lending work, the Bureau seeks to ensure that creditors do not 
discriminate on any prohibited bases. Mortgage servicing, and 
specifically default servicing, may introduce fair lending risks 
because of the complexity of certain processes, the range of default 
servicing options, and the discretion that can sometimes exist in 
evaluating and selecting among available default servicing options.
---------------------------------------------------------------------------

    \27\ Consumer Financial Protection Bureau, Supervisory 
Highlights Summer 2017 at 32-33 (September 12, 2017), https://www.consumerfinance.gov/documents/5386/201709_cfpb_Supervisory-Highlights_Issue-16.pdf.
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    In mortgage servicing, the Bureau's supervisory work has included 
use of the Mortgage Servicing Exam Procedures and the ECOA Baseline 
Modules, both of which are part of the Bureau's publically-available 
Supervision and Examination Manual. Bureau examination teams use these 
procedures to conduct ECOA Baseline Reviews, which evaluate 
institutions' compliance management systems (CMS), or ECOA Targeted 
Reviews, which are more in-depth reviews of activities that may pose 
heightened fair lending risks to consumers. These exam procedures 
contain questions about, among other things, the fair lending training 
of servicing staff, fair lending monitoring of servicing, and servicing 
of consumers with limited English proficiency.
    In one or more ECOA targeted reviews of mortgage servicers, Bureau 
examiners found weaknesses in fair lending CMS. In general, examiners 
found deficiencies in oversight by board and senior management, 
monitoring and corrective action processes, compliance audits, and 
oversight of third-party service providers.
    In one or more examinations, data quality issues, which were 
related to a lack of complete and accurate loan servicing records, made 
certain fair lending analyses difficult or impossible to perform. 
Examiners attributed these data quality issues to significant 
weaknesses in CMS-related policies, procedures, and service provider 
oversight.
    Separately, fair lending analysis at one or more mortgage servicers 
was affected by a lack of readily-accessible information concerning a 
borrower's ethnicity, race, and sex information that had been collected 
pursuant to Regulation C and transferred to the

[[Page 2828]]

servicer. One or more mortgage servicers acknowledged the importance of 
retaining in readily-accessible format--for the express purpose of 
performing future fair lending analyses--ethnicity, race, and sex data 
that it had received in the borrower's origination file.

4. Fair Lending Enforcement

    The Bureau conducts investigations of potential violations of HMDA 
and ECOA, and if it believes a violation has occurred, can file a 
complaint either through its administrative enforcement process or in 
Federal court. Like the other Federal bank regulators, the Bureau 
refers matters to the DOJ when it has reason to believe that a creditor 
has engaged in a pattern or practice of lending discrimination.\28\ 
However, when the Bureau makes a referral to the DOJ, the Bureau can 
still take its own independent action to address a violation. In 2016, 
the Bureau announced two fair lending enforcement actions in mortgage 
origination and indirect auto lending. The Bureau also has a number of 
ongoing fair lending investigations and has authority to settle or sue 
in a number of matters. In addition, the Bureau issued warning letters 
to mortgage lenders and mortgage brokers that may be in violation of 
HMDA requirements to report on housing-related lending activity.
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    \28\ 15 U.S.C. 1691e(g).
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4.1 Fair Lending Public Enforcement Actions

4.1.1 Mortgage
Nationstar Mortgage LLC
    On March 15, 2017, the Bureau resolved an enforcement action 
against Nationstar Mortgage LLC (Nationstar) for violating HMDA by 
submitting mortgage loan data for 2012 through 2014 containing 
substantial errors. HMDA requires many mortgage lenders to collect and 
report data about their mortgage lending to appropriate Federal 
agencies and make it available to the public. The consent order 
requires Nationstar to pay a $1.75 million penalty to the Bureau's 
Civil Penalty Fund. The Nationstar action is the largest HMDA civil 
penalty imposed to date by the Bureau, which stems from Nationstar's 
market size, the substantial magnitude of its errors, and its history 
of previous violations.
    In addition to paying the civil penalty, Nationstar must take the 
necessary steps to improve its compliance management and prevent future 
violations.\29\ Nationstar also must review, correct, and make 
available its corrected HMDA data from 2012-14. Since the Bureau's 
examination, Nationstar has been taking steps to improve its HMDA 
compliance management system and increase the accuracy of its HMDA 
reporting.
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    \29\ Consent Order, In the Matter of Nationstar Mortgage LLC, 
File No. 2017-CFPB-0011 (Mar. 15, 2017), http://files.consumerfinance.gov/f/documents/201703_cfpb_Nationstar-Mortgage-consent-order.pdf.
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    Nationstar, a nationwide nonbank mortgage lender headquartered in 
Coppell, Texas (now doing business as Mr. Cooper), is a wholly-owned 
subsidiary of Nationstar Mortgage Holdings Inc. With nearly 3 million 
customers, Nationstar Mortgage Holdings is a major participant in the 
mortgage servicing and origination markets. According to 2014 data, 
Nationstar was the ninth-largest HMDA reporter by total mortgage 
originations, the sixth largest by applications received, and the 
thirteenth largest by money lent. From 2010 to 2014, Nationstar's 
number of HMDA mortgage loans increased by nearly 900 percent.
    In its supervision process, the Bureau found that Nationstar's HMDA 
compliance systems were deficient, and not reasonably adapted to avoid 
the identified errors. Specifically, Nationstar failed to maintain 
detailed HMDA data collection and validation procedures, and failed to 
implement adequate compliance procedures, even after it knew was 
required to improve its HMDA compliance. It also produced HMDA data 
discrepancies by failing to consistently define data among its various 
lines of business. Nationstar has a history of HMDA non-compliance. In 
2011, the Commonwealth of Massachusetts Division of Banks reached a 
settlement with Nationstar to address HMDA compliance deficiencies. The 
samples reviewed by the Bureau showed substantial error rates in three 
consecutive reporting years, even after the Massachusetts settlement 
was reached. In the samples reviewed, the Bureau found error rates of 
13 percent in 2012, 33 percent in 2013, and 21 percent in 2014.
4.1.2 Credit Cards
American Express Centurion Bank and American Express Bank, FSB
    On August 23, 2017, the Bureau took action against American Express 
Centurion Bank and American Express Bank, FSB (collectively referred to 
as American Express), for violating ECOA by discriminating against 
consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. 
territories by providing them with credit and charge card terms that 
were inferior in many respects to those available in the 50 U.S. 
states. American Express also discriminated against certain consumers 
with Spanish-language preferences by not providing them certain charge 
card collection offers that were provided to similarly-situated 
consumers without Spanish-language preferences. Over the course of at 
least ten years, more than 200,000 of these consumers were harmed by 
American Express's discriminatory practices. American Express has paid 
approximately $95 million in consumer redress during the course of the 
Bureau's review and American Express's review, and the Bureau Order 
requires it to pay at least another $1 million to fully compensate 
harmed consumers.\30\
---------------------------------------------------------------------------

    \30\ Consent Order, In the Matter of American Express Centurion 
Bank and American Express Bank, FSB, File No. 2017-CFPB-0016 (Aug. 
23, 2017), https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201708_cfpb_american-express_content-order.pdf.
---------------------------------------------------------------------------

    Beginning in 2013, American Express self-reported to the Bureau 
differences between terms associated with its Puerto Rico and U.S. 
Virgin Islands cards (collectively, Puerto Rico cards) and its cards 
offered in the 50 U.S. states (U.S. cards), as well as differences with 
respect to certain consumers with a Spanish-language preference. 
Through the course of a supervisory review, the Bureau concluded that, 
from at least 2005 to 2015, American Express's Puerto Rico cards had 
different, and often worse, pricing, rebates, promotional offers, 
underwriting, customer and account management services, and collections 
practices than its U.S. cards. These differences spanned the product 
lifecycle and included: Charging higher fees and interest rates and 
offering less advantageous pricing on promotional offers; imposing more 
stringent credit score cutoffs and lower credit limits; applying 
certain inferior servicing policies; and requiring more money to settle 
debt. The Bureau's review found that these differences constituted 
discrimination on the prohibited bases of race and national origin in 
violation of ECOA.
    Under the terms of the Bureau Order, American Express must develop 
and implement a comprehensive compliance plan to ensure that it 
provides credit and charge cards in a non-discriminatory manner to 
consumers in Puerto Rico, the U.S. territories, and customers in 
collection who prefer Spanish-language communications. The compliance 
plan must include any

[[Page 2829]]

necessary additional improvements to its compliance management system; 
compliance audit program; credit and charge card business structure, 
policies, and procedures; employee training procedures; and complaints 
procedures.
    During the Bureau's review, American Express provided monetary and 
non-monetary relief to harmed consumers, resulting in approximately $95 
million of remediation. The Bureau did not assess penalties based on a 
number of factors, including that American Express self-reported the 
violations to the Bureau, self-initiated remediation for the harm done 
to affected consumers, and fully cooperated with the Bureau's review 
and investigation.

4.2 Implementing Enforcement Orders

    When an enforcement action is resolved through a public enforcement 
order, the Bureau (together with the Justice Department, when relevant) 
takes steps to ensure that the respondent or defendant complies with 
the requirements of the order. As appropriate to the specific 
requirements of individual public enforcement orders, the Bureau may 
take steps to ensure that borrowers who are eligible for compensation 
receive remuneration and that the defendant has complied with the 
injunctive provisions of the order, including implementing a 
comprehensive fair lending compliance management system. Throughout 
2017, the Bureau worked to implement and oversee compliance with the 
pending public enforcement orders that were entered by Federal courts 
or issued by the Bureau's Director in prior years.
4.2.1 Settlement Administration
Settlement Administration
Toyota Motor Credit Corporation
    On December 29, 2017, participation materials were mailed to 
potentially eligible African-American and Asian and Pacific Islander 
borrowers whom Toyota Motor Credit overcharged for their auto loans 
notifying them how to participate in the settlement, resulting from a 
2016 enforcement action brought by the Bureau and Justice Department 
against Toyota for alleged discrimination in auto lending.\31\
---------------------------------------------------------------------------

    \31\ Consent Order, In re Toyota Motor Credit Corp., CFPB No. 
2016-CFPB-0002 (Feb. 2, 2016), http://files.consumerfinance.gov/f/201602_cfpb_consent-order-toyota-motor-credit-corporation.pdf.
---------------------------------------------------------------------------

Provident Funding Associates
    On November 2, 2017, the Bureau announced the mailing of 
remuneration checks to consumers, totaling $9 million, plus accrued 
interest, to eligible borrowers resulting from a 2015 enforcement 
action brought by the Bureau and Justice Department against Provident 
for alleged discrimination in mortgage lending.\32\
---------------------------------------------------------------------------

    \32\ Patrice Alexander Ficklin, African-American and Hispanic 
borrowers harmed by Provident will receive $9 million in 
compensation, Consumer Financial Protection Bureau (Nov. 2, 2017), 
https://www.consumerfinance.gov/about-us/blog/african-american-and-hispanic-borrowers-harmed-provident-will-receive-9-million-compensation/.
---------------------------------------------------------------------------

American Honda Finance Corporation
    On October 2, 2017, participating African-American, Hispanic, and 
Asian and/or Pacific Islander borrowers, whom Honda Finance overcharged 
for their auto loans, were mailed checks totaling $24 million, plus 
accrued interest, resulting from a 2015 enforcement action brought by 
the Bureau and Justice Department against Honda for alleged 
discrimination in auto lending.\33\
---------------------------------------------------------------------------

    \33\ Consent Order, In re American Honda Finance Corp., CFPB No. 
2015-CFPB-0014 (July 14, 2015), http://files.consumerfinance.gov/f/201507_cfpb_consent-order_honda.pdf.
---------------------------------------------------------------------------

Ally Financial Inc. and Ally Bank
    In 2017, Ally Financial Inc. and Ally Bank completed their payments 
totaling $48.8 million to consumers whom Ally determined were both 
eligible and overcharged on auto loans booked during 2016 pursuant to 
the December 2013 enforcement actions and consent orders with the 
Justice Department and the Bureau.

4.3 ECOA Referrals to the Department of Justice

    The Bureau must refer to the Justice Department a matter when it 
has reason to believe that a creditor has engaged in a pattern or 
practice of lending discrimination in violation of ECOA.\34\ The Bureau 
also may refer other potential ECOA violations to the DOJ.\35\ In 2017, 
the Bureau referred two matters with ECOA violations to the Justice 
Department. In both of the matters, the DOJ deferred to the Bureau's 
handling of the matters and declined to open its own investigation. The 
Bureau's referrals to the DOJ in 2017 involved discrimination in 
mortgage servicing on the basis of the receipt of public assistance 
income, and discrimination in credit card account management, 
installment lending, and mortgage servicing on the bases of national 
origin and race.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 1691e(g).
    \35\ Id.
---------------------------------------------------------------------------

4.4 Pending Fair Lending Investigations

    In 2017, the Bureau had a number of ongoing fair lending 
investigations of a number of institutions involving a variety of 
consumer financial products. Consistent with the Bureau's risk-based 
priorities, one key area on which the Bureau focused its fair lending 
enforcement efforts was addressing potential discrimination in mortgage 
lending, including the unlawful practice of redlining. Redlining occurs 
when a lender provides unequal access to credit, or unequal terms of 
credit, because of the racial or ethnic composition of a neighborhood. 
At the end of 2017, the Bureau had a number of pending investigations 
in this and other areas.

5. Guidance and Rulemaking

5.1 HMDA and Regulation C

    Consistent with the Bureau's obligation to work with private 
industry to ``promot[e] fair lending . . . compliance,'' in 2017 the 
Bureau published several regulatory and guidance documents related to 
HMDA and Regulation C, as reported below.\36\
---------------------------------------------------------------------------

    \36\ See Dodd-Frank Act section 1013(c)(2)(C), Public Law 111-
203, 124 Stat. 1376 (2010) (codified at 12 U.S.C. 5493(c)(2)(C)).
---------------------------------------------------------------------------

    On August 22, 2017, the Bureau, together with the other member 
agencies of the FFIEC, announced new FFIEC HMDA Examiner Transaction 
Testing Guidelines (Guidelines) for all financial institutions that 
report HMDA data.\37\ The Guidelines will apply to the examination of 
HMDA data collected beginning in 2018, and reported beginning in 2019.
---------------------------------------------------------------------------

    \37\ FFIEC HMDA Examiner Transaction Testing Guidelines, https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201708_cfpb_ffiec-hmda-examiner-transaction-testing-guidelines.pdf.
---------------------------------------------------------------------------

    The Bureau issued a proposed rule in April 2017 \38\ seeking 
comment on amendments to certain provisions of the 2015 HMDA Final Rule 
to make technical corrections and to clarify certain requirements under 
Regulation C, and issued a second proposal in July 2017 \39\ to 
increase temporarily the institutional and transactional coverage 
thresholds for open-end lines of credit. On August 24, 2017, after 
reviewing the

[[Page 2830]]

comments received, the Bureau issued a final rule amending Regulation 
C.\40\
---------------------------------------------------------------------------

    \38\ Technical Corrections and Clarifying Amendments to the Home 
Mortgage Disclosure (Regulation C) October 2015 Final Rule, https://www.consumerfinance.gov/policy-compliance/rulemaking/rules-under-development/technical-corrections-and-clarifying-amendments-home-mortgage-disclosure-october-2015-final-rule/.
    \39\ Home Mortgage Disclosure (Regulation C), Temporary Increase 
in Institutional and Transactional Coverage Thresholds for Open-End 
Lines of Credit, https://www.consumerfinance.gov/policy-compliance/rulemaking/rules-under-development/home-mortgage-disclosure-regulation-c-temporary-increase-institutional-and-transactional-coverage-thresholds-open-end-lines-credit/.
    \40\ Consumer Financial Protection Bureau, Home Mortgage 
Disclosure (Regulation C) Final Rule, https://www.consumerfinance.gov/policy-compliance/rulemaking/final-rules/regulation-c-home-mortgage-disclosure-act/.
---------------------------------------------------------------------------

    On September 20, 2017, the Bureau issued proposed policy guidance 
regarding the data the Bureau may make available to the public 
beginning in 2019 from the HMDA data collected by financial 
institutions in or after 2018. The proposal described the modifications 
that the Bureau intends to apply to the loan-level HMDA data to protect 
applicant and borrower privacy, and it sought comment on those 
proposals.\41\
---------------------------------------------------------------------------

    \41\ Disclosure of Loan-Level HMDA Data, http://files.consumerfinance.gov/f/documents/201709_cfpb_hmda-disclosure-policy-guidance.pdf.
---------------------------------------------------------------------------

    In December 2017, the FFIEC agencies issued public statements on 
HMDA implementation announcing that the Bureau does not intend to 
require data resubmission unless data errors are material or assess 
penalties with respect to errors in data collected in 2018 and reported 
in 2019 under HMDA. The Bureau's statement also announced that the 
Bureau intends to engage in a rulemaking to reconsider various aspects 
of the 2015 HMDA Rule such as the institutional and transactional 
coverage tests and the rule's discretionary data points.\42\
---------------------------------------------------------------------------

    \42\ Consumer Financial Protection Bureau, CFPB Issues Public 
Statement On Home Mortgage Disclosure Act Compliance, (December 21, 
2017), https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-public-statement-home-mortgage-disclosure-act-compliance/.
---------------------------------------------------------------------------

5.1.1 HMDA Announcement
    On December 21, 2017, the Bureau issued the following public 
statement regarding HMDA implementation:
    Recognizing the impending January 1, 2018 effective date of the 
Bureau's amendments to Regulation C and the significant systems and 
operational challenges needed to adjust to the revised regulation, for 
HMDA data collected in 2018 and reported in 2019 the Bureau does not 
intend to require data resubmission unless data errors are material. 
Furthermore, the Bureau does not intend to assess penalties with 
respect to errors in data collected in 2018 and reported in 2019. 
Collection and submission of the 2018 HMDA data will provide financial 
institutions an opportunity to identify any gaps in their 
implementation of amended Regulation C and make improvements in their 
HMDA compliance management systems for future years. Any examinations 
of 2018 HMDA data will be diagnostic to help institutions identify 
compliance weaknesses and will credit good faith compliance efforts. 
The Bureau intends to engage in a rulemaking to reconsider various 
aspects of the 2015 HMDA Rule such as the institutional and 
transactional coverage tests and the rule's discretionary data points.
    For data collected in 2017, financial institutions will submit 
their reports in 2018 in accordance with the current Regulation C using 
the Bureau's HMDA Platform.\43\
---------------------------------------------------------------------------

    \43\ CFPB Issues Public Statement On Home Mortgage Disclosure 
Act Compliance (December 21, 2017), https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-public-statement-home-mortgage-disclosure-act-compliance/.
---------------------------------------------------------------------------

5.2 ECOA and Regulation B

    On March 24, 2017, the Bureau issued a proposed rule seeking 
comment on amendments to Regulation B providing creditors additional 
flexibility in complying with Regulation B in order to facilitate 
compliance with Regulation C, adding certain model forms and removing 
others from Regulation B, and making various other amendments to 
Regulation B and its commentary to facilitate the collection and 
retention of information about the ethnicity, sex, and race of certain 
mortgage applicants.\44\ After considering the comments received, the 
Bureau issued a final rule on September 20, 2017, amending Regulation 
B.\45\
---------------------------------------------------------------------------

    \44\ Proposed Amendments to Equal Credit Opportunity Act 
(Regulation B) Ethnicity and Race Information Collection, https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201703_cfpb_NPRM-to-amend-Regulation-B.pdf.
    \45\ Amendments to Equal Credit Opportunity Act (Regulation B) 
Ethnicity and Race Information Collection, https://www.consumerfinance.gov/policy-compliance/rulemaking/final-rules/amendments-equal-credit-opportunity-act-regulation-b-ethnicity-and-race-information-collection/.
---------------------------------------------------------------------------

    On November 20, 2017, the Bureau issued an official approval 
pursuant to section 706(e) of ECOA of the final redesigned Uniform 
Residential Loan Application that included a question asking applicant 
language preference.\46\ Bureau staff determined that the final 
redesigned URLA is in compliance with Regulation B Sec.  1002.5(b) 
through (d), which provide rules regarding requests for 
information.\47\
---------------------------------------------------------------------------

    \46\ Consumer Financial Protection Bureau, Final Redesigned 
Uniform Residential Loan Application Status under Regulation B, 
(Nov. 20, 2017), https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_urla-language-preference-question_bureau-official-approval_112017.pdf.
    \47\ Regulation B Sec.  1002.5(b) provides rules concerning 
requests for information about race, color, religion, national 
origin, or sex. Section 1002.5(c) provides rules concerning requests 
for information about a spouse or former spouse. Section 1002.5(d) 
provides rules concerning requests for information regarding marital 
status; income from alimony, child support, or separate maintenance; 
and childbearing or childrearing.
---------------------------------------------------------------------------

5.3 Small Business Data Collection

    Section 1071 of the Dodd-Frank Act amends ECOA to require financial 
institutions to collect, report, and make public certain information 
concerning credit applications made by women-owned, minority-owned, and 
small businesses. The amendments to ECOA made by the Dodd-Frank Act 
require that specific data be collected, maintained, and reported, 
including but not limited to the type of loan applied for, the amount 
of credit applied for, the type of action taken with regard to each 
application, the census tract of the principal place of business of the 
loan applicant, and the race, sex, and ethnicity of the principal 
owners of the business. The Dodd-Frank Act also provides authority for 
the Bureau to require any additional data that the Bureau determines 
would aid in fulfilling the purposes of section 1071. The Bureau issued 
a Request for Information in 2017 seeking public comment on, among 
other things, the types of credit products offered and the types of 
data currently collected by small business lenders and the potential 
complexity, cost of, and privacy issues related to, small business 
lending data collection. The information received will help the Bureau 
determine how to implement efficiently the Dodd-Frank Act's mandate 
regarding small business lending data reporting, while minimizing 
burdens on lenders.

5.4 Amicus Program

    The Bureau's Amicus Program files amicus, or friend-of-the-court, 
briefs in court cases concerning the Federal consumer financial 
protection laws that the Bureau is charged with implementing, including 
ECOA. These amicus briefs provide the courts with Bureau views on 
significant consumer financial protection issues and help ensure that 
consumer financial protection statutes and regulations are correctly 
and consistently interpreted by the courts.
    On September 13, 2017, the Bureau filed an amicus brief in Regions 
Bank v. Legal Outsource PA, in the United States Court of Appeals for 
the Eleventh Circuit.\48\ This case involves claims under ECOA against 
a bank that allegedly required a business owner's spouse to guarantee a 
loan to the business because of the fact that the business owner was 
married. The

[[Page 2831]]

Bureau filed an amicus brief arguing that the district court erred in 
rejecting claims by the business and various guarantors of the loan. 
First, the brief argued that a business entity can state a claim for 
ECOA discrimination based on its owner's marital status. Second, the 
brief argued that regulations issued pursuant to ECOA reasonably 
interpret the term ``applicant'' to encompass guarantors such that non-
borrowers who are required to guarantee their spouse's loans can state 
claims for marital-status discrimination.
---------------------------------------------------------------------------

    \48\ A copy of the Bureau's amicus brief is available on its 
amicus web page, https://www.consumerfinance.gov/policy-compliance/amicus/briefs/regions-bank-v-legal-outsource-pa/.
---------------------------------------------------------------------------

5.5 No-Action Letter

    In 2017, the Bureau maintained a ``No Action Letter'' policy \49\ 
that allowed companies to apply for a statement from Bureau staff 
regarding an innovative product or service that offers the potential 
for significant consumer benefit where there is substantial uncertainty 
about whether or how specific provisions of law would be applied. A no-
action letter issued pursuant to that policy would advise a recipient 
that staff has no present intention to recommend initiation of an 
enforcement or supervisory action with respect to the specific matter.
---------------------------------------------------------------------------

    \49\ See proposed policy at: https://www.consumerfinance.gov/policy-compliance/notice-opportunities-comment/archive-closed/proposed-policy-on-no-action-letters/.
---------------------------------------------------------------------------

    On September 14, 2017, Bureau staff issued its first no-action 
letter to Upstart Network, Inc., a company that uses alternative data 
in making credit and pricing decisions.\50\ The Bureau's no-action 
letter stated that Bureau staff had no present intention to recommend 
initiation of an enforcement or supervisory action against Upstart with 
regard to application of ECOA and Regulation B. The letter applies to 
Upstart's automated model for underwriting applicants for unsecured 
non-revolving credit, as that model is described in the company's 
application materials. The letter is specific to the facts and 
circumstances of Upstart and does not serve as an endorsement of the 
use of any particular variables or modeling techniques in credit 
underwriting.
---------------------------------------------------------------------------

    \50\ CFPB Announces First No-Action Letter to Upstart Network, 
Consumer Financial Protection Bureau (Sept. 14, 2017), https://www.consumerfinance.gov/about-us/newsroom/cfpb-announces-first-no-action-letter-upstart-network/.
---------------------------------------------------------------------------

    Upstart Network, Inc. is based in San Carlos, California, and 
provides an online lending platform for consumers to apply for personal 
loans, including credit card refinancing, student loans, and debt 
consolidation. Upstart evaluates consumer loan applications using 
traditional factors such as credit score and income, as well as 
incorporating non-traditional sources of data such as education and 
employment history.
    Under the terms of the no-action letter, Upstart will share certain 
information with the Bureau regarding the loan applications it 
receives, how it decides which loans to approve, and how it will 
mitigate risk to consumers, as well as information on how its model 
expands access to credit for traditionally-underserved populations. The 
Bureau expects that this information will further its understanding of 
the use of alternative data in credit decision-making.
    The Upstart no-action letter was part of the Bureau's continued 
exploration in 2017 of innovation through the use of alternative data 
to help expand responsible and fair credit access for consumers who are 
credit invisible or lack sufficient credit history to provide them 
traditional access to credit markets.

6. Interagency Coordination

6.1 Interagency Coordination and Engagement

    The Office of Fair Lending regularly coordinates the Bureau's fair 
lending regulatory, supervisory, and enforcement activities with those 
of other Federal agencies and State regulators to promote consistent, 
efficient, and effective enforcement of Federal fair lending laws.\51\ 
Through our interagency engagement, we work to address current and 
emerging fair lending risks.
---------------------------------------------------------------------------

    \51\ Dodd-Frank Act section 1013(c)(2)(B) (codified at 12 U.S.C. 
5493(c)(2)(B)).
---------------------------------------------------------------------------

    On August 22, 2017, the FFIEC agencies announced new HMDA Examiner 
Transaction Testing Guidelines (Guidelines).\52\ The new Guidelines 
were accompanied by the release of a blog post by the Bureau.\53\ The 
Guidelines represent a joint effort led by the Bureau, together with 
the FDIC, the FRB, the NCUA, and the OCC to provide--for the first 
time--uniform guidelines across all Federal HMDA supervisory agencies. 
This collaboration began with the Bureau issuing a Request for 
Information \54\ and holding outreach meetings in which the other 
supervisory agencies participated. The agencies then worked together to 
develop the Guidelines.
---------------------------------------------------------------------------

    \52\ FFIEC HMDA Examiner Transaction Testing Guidelines, https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201708_cfpb_ffiec-hmda-examiner-transaction-testing-guidelines.pdf.
    \53\ Tim Lambert & Eric Wang, Here's what you need to know about 
the new FFIEC HMDA Examiner Transaction Testing Guidelines, Consumer 
Financial Protection Bureau (Aug. 22, 2017), https://www.consumerfinance.gov/about-us/blog/heres-what-you-need-know-about-new-ffiec-hmda-examiner-transaction-testing-guidelines/.
    \54\ Request for Info. Regarding Home Mortgage Disclosure Act 
Resubmission Guidelines, 81 FR 1,405 (Jan. 12, 2016), https://www.gpo.gov/fdsys/pkg/FR-2016-01-12/pdf/2016-00442.pdf.
---------------------------------------------------------------------------

    The Bureau, along with the FTC, DOJ, HUD, FDIC, FRB, NCUA, OCC, and 
the Federal Housing Finance Agency, comprise the Interagency Task Force 
on Fair Lending. The Task Force meets regularly to discuss fair lending 
enforcement efforts, share current methods of conducting supervisory 
and enforcement fair lending activities, and coordinate fair lending 
policies.
    The Bureau belongs to a standing working group of Federal 
agencies--with the DOJ, HUD, and FTC--that meets regularly to discuss 
issues relating to fair lending enforcement. These agencies constitute 
the Interagency Working Group on Fair Lending Enforcement. The agencies 
use these meetings to discuss fair lending developments and trends, 
methodologies for evaluating fair lending risks and violations, and 
coordination of fair lending enforcement efforts. In addition to these 
interagency working groups, we meet periodically and on an ad hoc basis 
with the Justice Department and prudential regulators to coordinate our 
fair lending work.
    In 2017, the Bureau chaired the FFIEC HMDA/Community Reinvestment 
Act Data Collection Subcommittee, a subcommittee of the FFIEC Task 
Force on Consumer Compliance (Task Force), that oversees FFIEC projects 
and programs involving HMDA data collection and dissemination, the 
preparation of the annual FFIEC budget for processing services, and the 
development and implementation of other related HMDA processing 
projects as directed by the Task Force.

7. Outreach: Promoting Fair Lending Compliance and Education

    Pursuant to Dodd-Frank,\55\ the Office of Fair Lending regularly 
engages in outreach with industry, bar associations, consumer 
advocates, civil rights organizations, academia, and other government 
agencies, to help educate and inform our stakeholders about fair 
lending as well as learn about emerging trends or products that pose 
fair lending risk. The Bureau is committed to communicating directly 
with all stakeholders on its policies, compliance expectations, and 
fair lending priorities, and to receiving valuable input on fair

[[Page 2832]]

lending issues. Outreach is accomplished through issuance of Reports to 
Congress, Interagency Statements, Supervisory Highlights, Compliance 
Bulletins, letters, blog posts, speeches and presentations at 
conferences and trainings, and participation in meetings to discuss 
fair lending and access to credit.
---------------------------------------------------------------------------

    \55\ Dodd-Frank Act section 1013(c)(2)(C) (codified at 12 U.S.C. 
5493(c)(2)(C)).
---------------------------------------------------------------------------

7.1 Blog Posts

    The Bureau regularly uses its blog as a tool to communicate 
effectively to consumers and other stakeholders on timely issues, 
emerging areas of concern, Bureau initiatives, and more. In 2017 we 
published five blog posts related to fair lending topics including: 
Providing consumers updated information about a fair lending 
enforcement action,\56\ announcing the Bureau's first no-action 
letter,\57\ announcing new guidelines on HMDA examiner transaction 
testing,\58\ issuing an official approval of the final redesigned 
Uniform Residential Loan Application,\59\ and noting the release of the 
fair lending annual report on 2016 activities.\60\
---------------------------------------------------------------------------

    \56\ Patrice Alexander Ficklin, African-American and Hispanic 
borrowers harmed by Provident will receive $9 million in 
compensation, Consumer Financial Protection Bureau (Nov. 2, 2017), 
https://www.consumerfinance.gov/about-us/blog/african-american-and-hispanic-borrowers-harmed-provident-will-receive-9-million-compensation/.
    \57\ Patrice Alexander Ficklin and Dan Quan, Supporting 
consumer-friendly innovation: Announcing our first no-action letter, 
Consumer Financial Protection Bureau (Sept. 14, 2017), https://www.consumerfinance.gov/about-us/blog/supporting-consumer-friendly-innovation-announcing-our-first-no-action-letter/.
    \58\ Tim Lambert & Eric Wang, Here's what you need to know about 
the new FFIEC HMDA Examiner Transaction Testing Guidelines, Consumer 
Financial Protection Bureau (Aug. 22, 2017), https://www.consumerfinance.gov/about-us/blog/heres-what-you-need-know-about-new-ffiec-hmda-examiner-transaction-testing-guidelines/.
    \59\ J. Frank Vespa-Papaleo, Identification of language 
preference on the Uniform Residential Loan Application, Consumer 
Financial Protection Bureau (Nov. 20, 2017), https://www.consumerfinance.gov/about-us/blog/identification-language-preference-uniform-residential-loan-application/.
    \60\ Patrice Alexander Ficklin, Safeguarding against credit 
discrimination: 2016 Fair Lending Report (April 14, 2017), https://www.consumerfinance.gov/about-us/blog/safeguarding-against-credit-discrimination-2016-fair-lending-report/.
_____________________________________-

    The blog posts may be accessed at www.consumerfinance.gov/blog.

7.2 Supervisory Highlights

    Supervisory Highlights reports anchor the Bureau's efforts to 
communicate about the Bureau's supervisory activity. More information 
about the topics discussed this year in Supervisory Highlights can be 
found in Section 3.1 of this Report. As with all Bureau resources, all 
editions of Supervisory Highlights are available on 
www.consumerfinance.gov/reports.

7.3 Speaking Engagements & Roundtables

    Staff from the Bureau's Office of Fair Lending and Equal 
Opportunity participated in a number of outreach speaking events and 
roundtables throughout 2017 to further the Bureau's mission of 
educating and informing stakeholders about fair lending and receiving 
input from stakeholders. In these events, staff shared information on 
fair lending priorities, emerging issues, and heard feedback from 
stakeholders on Bureau fair-lending work. Some examples of the topics 
covered include fair lending priorities, fair lending modeling and 
governance, redlining, HMDA, small business lending, alternative data, 
and installment lending contracts.

                        Appendix A: Defined Terms
------------------------------------------------------------------------
                       Term                              Definition
------------------------------------------------------------------------
AMS...............................................  Agricultural
                                                     Marketing Service
                                                     of the U.S.
                                                     Department of
                                                     Agriculture.
Bureau............................................  The Bureau of
                                                     Consumer Financial
                                                     Protection.
CMS...............................................  Compliance
                                                     Management System.
CRA...............................................  Community
                                                     Reinvestment Act.
Dodd-Frank Act....................................  The Dodd-Frank Wall
                                                     Street Reform and
                                                     Consumer Protection
                                                     Act.
DOJ...............................................  The U.S. Department
                                                     of Justice.
DOT...............................................  The U.S. Department
                                                     of Transportation.
ECOA..............................................  The Equal Credit
                                                     Opportunity Act.
FCA...............................................  Farm Credit
                                                     Administration.
FDIC..............................................  The U.S. Federal
                                                     Deposit Insurance
                                                     Corporation.
Federal Reserve Board.............................  The U.S. Board of
                                                     Governors of the
                                                     Federal Reserve
                                                     System.
FFIEC.............................................  The U.S. Federal
                                                     Financial
                                                     Institutions
                                                     Examination
                                                     Council--the FFIEC
                                                     member agencies are
                                                     the Board of
                                                     Governors of the
                                                     Federal Reserve
                                                     System (FRB), the
                                                     Federal Deposit
                                                     Insurance
                                                     Corporation (FDIC),
                                                     the National Credit
                                                     Union
                                                     Administration
                                                     (NCUA), the Office
                                                     of the Comptroller
                                                     of the Currency
                                                     (OCC), and the
                                                     Bureau of Consumer
                                                     Financial
                                                     Protection (BCFP).
                                                     The State Liaison
                                                     Committee was added
                                                     to FFIEC in 2006 as
                                                     a voting member.
FRB...............................................  The U.S. Board of
                                                     Governors of the
                                                     Federal Reserve
                                                     System.
FTC...............................................  The U.S. Federal
                                                     Trade Commission.
GIPSA.............................................  Grain Inspection,
                                                     Packers and
                                                     Stockyards
                                                     Administration
                                                     (GIPSA) of the U.S.
                                                     Department of
                                                     Agriculture.
HMDA..............................................  The Home Mortgage
                                                     Disclosure Act.
HUD...............................................  The U.S. Department
                                                     of Housing and
                                                     Urban Development.
NCUA..............................................  The National Credit
                                                     Union
                                                     Administration.
OCC...............................................  The U.S. Office of
                                                     the Comptroller of
                                                     the Currency.
SBA...............................................  Small Business
                                                     Administration.
SEC...............................................  U.S. Securities and
                                                     Exchange
                                                     Commission.
USDA..............................................  U.S. Department of
                                                     Agriculture.
------------------------------------------------------------------------

[2]. Regulatory Requirements

    This Fair Lending Report of the Bureau of Consumer Financial 
Protection summarizes existing requirements under the law, and 
summarizes findings made in the course of exercising the Bureau's 
supervisory and enforcement authority. It is therefore exempt from 
notice and comment rulemaking requirements under the Administrative 
Procedure Act pursuant to 5 U.S.C. 553(b). Because no

[[Page 2833]]

notice of proposed rulemaking is required, the Regulatory Flexibility 
Act does not require an initial or final regulatory flexibility 
analysis. 5 U.S.C. 603(a), 604(a). The Bureau has determined that this 
Fair Lending Report does not impose any new or revise any existing 
recordkeeping, reporting, or disclosure requirements on covered 
entities or members of the public that would be collections of 
information requiring OMB approval under the Paperwork Reduction Act, 
44 U.S.C. 3501, et seq.

    Dated: February 1, 2019.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2019-01568 Filed 2-7-19; 8:45 am]
 BILLING CODE 4810-AM-P