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Department of Justice
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Thursday, December 6, 2012

Justice Department and Consumer Financial Protection Bureau Pledge to Work Together to Protect Consumers from Credit Discrimination

Memorandum of Understanding Creates Framework for Strong Coordination and Cooperation

The Department of Justice and the Consumer Financial Protection Bureau (CFPB) signed an agreement today to strengthen coordination on fair lending enforcement and avoid duplication of their respective federal law enforcement efforts.


“The Department of Justice welcomes the new tools and resources the CFPB can bring to the fight against lending discrimination,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Cooperation between our two agencies promotes strong and effective civil rights enforcement, and today’s agreement will further our ongoing collaborative efforts.”


“Discrimination undermines equal access to credit,” said Richard Cordray, Director of the CFPB. “Today’s agreement is a critical step to better protecting consumers from illegal and discriminatory lending practices. We look forward to continuing our partnership with the Justice Department under this new framework.”


The memorandum of understanding (MOU) can be found at: http://files.consumerfinance.gov/f/201212_cfpb_doj-fair-lending-mou.pdf.


Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB works with the department and other regulators to promote consistent, efficient and effective enforcement of federal fair lending laws. The Dodd-Frank Act also expressly authorizes the CFPB to conduct joint investigations with the department in matters relating to fair lending.


Both the CFPB and the Justice Department have authority to protect against discriminatory lending under the Equal Credit Opportunity Act (ECOA). The ECOA makes it illegal for creditors to discriminate against applicants in credit transactions because of race, color, religion, national origin, sex, marital status, age, income coming from a public assistance program or an applicant’s exercise of certain consumer protection rights.


The department has the authority to bring federal lawsuits to enforce the ECOA against any creditor that engages in a pattern or practice in violation of the ECOA or based on referrals of ECOA violations from federal bank regulators including the CFPB. The CFPB is authorized to bring public enforcement actions against any person subject to the CFPB’s supervisory or enforcement authority for violations of the ECOA. The CFPB is also required to refer certain violations of the ECOA to the department for possible enforcement actions.


The agencies are committed to cooperation and avoiding duplicative efforts. Today’s MOU outlines the general framework for:

  • Sharing information and preserving its confidentiality : The agencies will be sharing information in matters that the CFPB refers to the Justice Department, in joint investigations under the ECOA, and in order to coordinate fair lending enforcement. The MOU establishes strict confidentiality protections for this shared information.
  • Joint investigations and coordination : The MOU provides for collaboration in investigations as well as coordination in joint investigations. The agencies will also meet regularly to discuss pending fair lending investigations and opportunities for coordination.
  • Referrals and notifications between the agencies: Like other federal bank regulators, the CFPB will refer matters to the Justice Department when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination. Because a referral to the Justice Department does not affect the CFPB’s authority to pursue its own supervisory or enforcement action, the CFPB and the Justice Department will coordinate their efforts to avoid unnecessarily duplicative actions. The agencies have also agreed to notify each other at key stages of their enforcement work, such as the opening of an investigation or filing of a lawsuit.

The agencies will periodically assess the implementation of this agreement and are committed to finding ways to further strengthen their coordination efforts.


The CFPB’s Office of Fair Lending and Equal Opportunity, together with the bureau’s Office of Enforcement, leads the bureau’s enforcement of fair lending laws, including the ECOA and the Home Mortgage Disclosure Act (HMDA). Today, the CFPB published its first annual Fair Lending Report, which highlights the Bureau’s recent accomplishments in fair lending. The report discusses the bureau’s efforts to fulfill its mandate to ensure fair, equitable, and nondiscriminatory access to credit for American consumers. Additionally, the report fulfills the Bureau’s congressional reporting requirements under the Dodd-Frank Act, the ECOA and HMDA.


A copy of this report is available at: http://files.consumerfinance.gov/f/201212_cfpb_fair-lending-report.pdf


The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 22 lending matters under the Fair Housing Act, the ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for a minimum of $500 million in monetary relief for more than 300,000 individual borrowers. The attorney general’s annual reports to Congress subject to the ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/


The fair lending enforcement work of the CFPB and the Justice Department is part of efforts underway by the Financial Fraud Enforcement Task Force (FFETF) which was created to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The CFPB and the department’s Civil Rights Division are among the co-chairs of the FFETF’s Non-Discrimination Working Group. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. The task force has established financial fraud coordinators in every U.S. attorney’s office around the country to help make these broad mandates a reality on the ground. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.

Consumer Protection
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Updated August 20, 2015