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WASHINGTON, D.C. — The Consumer Financial Protection Bureau
recently alerted lenders from all sectors — including vehicle finance companies
and buy-here, pay-here dealers — of "fair notice on fair lending."

CFPB officials indicated they are continuing to monitor
activities so lenders meet the requirements of regulations such as the Equal
Credit Opportunity Act and the Consumer Credit Protection Act.

In a recent blog post, Patrice Ficklin, the CFPB's assistant
director for the office of fair lending and equal opportunity, offered a
lengthy explanation of the bureau's efforts.

"Millions of Americans rely on loans and other credit
products to attend college, buy cars, purchase homes, or open businesses,"
Ficklin began. "For many of us, access to credit makes it possible to achieve
the American Dream of a better life for ourselves and our children. All too
often, credit discrimination stands in the way of this access. It keeps worthy
borrowers from the tools they need to reach their financial goals.

"Credit discrimination is illegal. Under the Equal Credit
Opportunity Act, a creditor may not discriminate against you because of
your race, color, religion, national origin, sex, marital status, or age (as
long as you are old enough to enter into a contract)," Ficklin continued. "It
is also against the law for a creditor to discriminate against you because you
receive public assistance income, or because you exercise in good faith any of
your rights under the Consumer Credit Protection Act."

The CFPB, created by the Dodd-Frank Act of 2010 which aimed
at regulating the financial industry further, thinks discrimination is not
always obvious.

"A borrower may not realize that she has been the victim of
intentional discrimination on the basis of her race or sex," Ficklin offered. "Moreover,
lending policies that seem evenhanded can be illegal if they have a
disproportionate, negative effect on a group that is protected under ECOA, such
as women or seniors. Lending practices that produce these adverse effects are
said to have a ‘disparate impact.' They are unlawful unless they meet a
legitimate business need that can't be met by an alternative that has a less
disparate impact. Discrimination that disparately impacts borrowers in
violation of the law hurts consumers and can threaten the economic stability of
our communities. That is why the law has long recognized this form of unlawful
credit discrimination."

The Consumer Financial Protection Bureau reiterated that it
is responsible for enforcing the Equal Credit Opportunity Act. Ficklin
emphasized the Office of Fair Lending and Equal Opportunity at the CFPB was
created to help ensure that all Americans have fair, equitable, and nondiscriminatory
access to credit.

"We will use every tool at our disposal to protect American
consumers," Ficklin pledged.

"We are letting both lenders and consumers know that in our
examination and enforcement work, we will combat unlawful, discriminatory
practices — including those that have an illegal disparate impact on protected
borrowers," Ficklin continued. "We will look not only at mortgage lending, but
also at other types of credit including student loans, loans for cars, and
credit cards.

"Access to credit is critical to a successful financial
future," Ficklin went on to say. "At the CFPB, we are committed to fighting
unlawful, discriminatory practices and creating a fair marketplace for all
consumers."

The CFPB's "fair notice on fair lending" can be reviewed
here.