The Consumer Financial Protection Bureau (the “Bureau” or “CFPB”) has made its first major organizational change under the leadership of Acting Director Mick Mulvaney. The Bureau moved the Office of Fair Lending and Equal Opportunity (the “Fair Lending Office”) inside the Office of the Director and stripped it of responsibility for enforcement and day-to-day oversight of companies. Fair lending enforcement and supervision has been assigned to the Office of Enforcement and Office of Supervision, respectively.
The Fair Lending Office, which previously was responsible for enforcement matters alleging discrimination in lending, will now focus on advocacy, coordination, and education, rather than supervision and enforcement. Certain fair lending enforcement actions led by the Fair Lending Office, particularly those involving allegations of discrimination in indirect auto lending as a result of dealer markups, proved extremely controversial. To some observers, the indirect auto lending actions exemplify the Bureau “pushing the envelope” on fair lending discrimination theories and its own jurisdiction. Acting Director Mulvaney has vowed that “pushing the envelope” is the one thing that will change at the Bureau under his leadership.
While civil rights and consumer groups worry that removing the Fair Lending Office’s enforcement powers may increase the likelihood that consumers will face continued discrimination in the economic arena, Acting Director Mulvaney’s spokesman dismissed that possibility. The spokesman stated that “[b]y elevating the Office of Fair Lending to the Director’s Office, we have enhanced its ability to focus on its other important responsibilities …[and b]y combining these efforts under one roof, we gain efficiency and consistency without sacrificing effectiveness.”