Noting CBA Members’ Longstanding History of Breaking the Law and Harming Consumers, Advocacy Organizations Call on CBA to Scrap its Politically Motivated Attacks on the CFPB
October 25, 2022 | WASHINGTON, D.C. — Today, the Student Borrower Protection Center (SBPC), Americans for Financial Reform Education Fund, the Debt Collective, Center for Responsible Lending, and Student Debt Crisis Center sent a letter to the Consumer Bankers Association (CBA) demanding that CBA abandon its bad-faith legal action against the Consumer Financial Protection Bureau (CFPB). In September, the CBA filed its lawsuit in order to roll back the CFPB’s crackdown against ongoing discrimination in consumer finance. As the advocates outline in their letter, the CBA’s thin legal reasoning and its members’ dark history of breaking a startling range of consumer protections—including, but not limited to, those prohibiting harmful discrimination—lay bare the true goal of CBA’s lawsuit: to defang the CFPB and pave the way for CBA members to prey on consumers with impunity.
The advocates call on the CBA to give up this doomed political stunt and refocus its efforts toward examining why its member organizations struggle so profoundly to comply with basic consumer protections and to refrain from discriminating against historically marginalized populations.
A copy of the letter to the Consumer Bankers Association can be found here: https://protectborrowers.org/wp-content/uploads/2022/10/Letter-to-CBA-Re_-CFPB-October-2022.pdf
“It is disgusting, but perhaps not surprising, to see the lengths that the bank lobby will go to defend lenders’ enthusiasm for discrimination,” said SBPC executive director Mike Pierce. “We may only ever be able to imagine what could have been accomplished if the CBA and its members allocated the time, money, and effort they spent on this vapid lawsuit toward weeding out bias and doing the work to finally comply with fair lending law. Instead, CBA has chosen to stand resolute in its support for racism.”
For years, consumer advocates have warned that major banking organizations continue to discriminate against consumers from marginalized communities. This discrimination has persisted despite the existence of robust fair lending statutes that outlaw biased conduct in the marketing, extension, and pricing of financial products.
In March 2022, the nation’s top consumer financial watchdog, the CFPB, updated the manual its team members use when conducting supervisory examinations of covered financial institutions to indicate that certain discriminatory practices may violate the Consumer Financial Protection Act’s (CFPA) prohibition on unfair, deceptive and abusive acts and practices (UDAAPs). The Consumer Financial Protection Act (a subsection of the Dodd-Frank Wall Street Reform and Consumer Protection Act) is the law that created the CFPB and granted it the authority to police consumer financial markets for UDAAPs. The CFPB’s March 2022 revision to its examination manual came after years of researchers, including those at the SBPC and a leading civil rights law firm, arguing that discrimination might already fit the definition of an “unfair” practice as banned under the CFPA.
In September 2022, the US Chamber of Commerce and various partner organizations including the CBA sued the CFPB in an effort to roll back the revision of the exam manual. These groups’ lawsuit also challenged the independent funding structure of the CFPB, a key measure that shields the CFPB from political interference. The case is currently pending in the Eastern District of Texas.
Read the CFPB’s March 2022 announcement indicating that it intends to consider discrimination as an “unfair” practice as part of its supervisory operations: CFPB Targets Unfair Discrimination in Consumer Finance
Read an April 2021 report from the SBPC and attorneys at Relman Colfax PLLC arguing that discrimination could fit within existing state and federal law prohibiting unfair, deceptive (and sometimes abusive) acts and practices: Discrimination is Unfair: Interpreting UDA(A)P to Prohibit Discrimination
About the Student Borrower Protection Center
The Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice for all.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.