Added on March 24, 2017
Proposed Rule Would Also Aid in Adoption of New Forms
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today released a proposal to amend Equal Credit Opportunity Act regulations to provide additional flexibility for mortgage lenders in the collection of consumer ethnicity and race information. The CFPB believes the proposed amendments will provide greater clarity to lenders regarding their obligations under the law, while promoting compliance with rules intended to ensure consumers are treated fairly.
"This law is a key part of the government's commitment to root out discrimination," said CFPB Director Richard Cordray. "This proposal will help industry comply with the law and help protect consumers against illegal discrimination."
The Equal Credit Opportunity Act (ECOA) is a federal civil rights law that protects against discrimination in the financial marketplace. Regulation B, the CFPB's rule implementing ECOA, includes restrictions regarding lenders' ability to ask consumers about their race, color, religion, national origin or sex, except in certain circumstances. These circumstances include required collection of the information for some mortgage applications under Regulation B.
The CFPB's proposal would provide compliance flexibility for individual mortgage lenders, and would also support the broader mortgage industry's ability to use consistent forms and compliance practices. Under the proposal, mortgage lenders would not be required to maintain different practices depending on their loan volume or other characteristics, allowing more lenders to adopt application forms that include expanded requests for information regarding a consumer's ethnicity and race, including the revised Uniform Residential Loan Application.
The proposal also contains other amendments to Regulation B and its commentary to facilitate compliance with Regulation B's requirements for the collection and retention of information about the ethnicity, race, and sex of applicants seeking certain types of mortgage loans.
The CFPB is committed to well-tailored and effective regulations and has sought to carefully calibrate its efforts to ensure consistency with respect to consumer financial protections across the financial services marketplace.
The CFPB seeks input from a wide range of stakeholders and invites the public to submit written comments on the proposal. The proposal will be open for public comment for 30 days after its publication in the Federal Register.
A copy of the proposal is available here: http://files.consumerfinance.gov/f/documents/201703_cfpb_NPRM-to-amend-Regulation-B.pdf