Federal Court Decision Undermines CFPB’s Efforts to Combat Financial Discrimination
FOR IMMEDIATE RELEASE
September 13, 2023
Contact: Janelle Brevard | jbrevard@nationalfairhousing.org
Federal Court Decision Undermines CFPB’s Efforts to Combat Financial Discrimination
Washington, D.C. — A federal court’s recent decision to prevent the Consumer Financial Protection Bureau (CFPB) from adding discrimination as an unfair practice is troubling and harmful, and it undermines the consumer protection agency’s efforts to combat financial discrimination, said National Fair Housing Alliance® (NFHA™) Executive Vice President, Nikitra Bailey. Read her full statement below.
“The ongoing failure of financial services providers to fairly serve all consumers and communities harms individuals and neighborhoods, stifles innovation, restricts economic progress, generates wealth loss, and makes the U.S. less globally competitive. Consumers of color consistently report being racially profiled while they are conducting rudimentary banking activities such as depositing a check, opening a small business account, or withdrawing money from a personal bank account. Moreover, these incidents place the consumers’ lives at risk as they are often accused by bank employees of having unlawful motives and detained by police. Just last year, the Black male director of the widely-acclaimed movie ‘Black Panther’ was assumed to be a bank robber and handcuffed after he merely attempted to withdraw money from his local bank branch. While these events are jaw-dropping and egregious, they are not covered by traditional fair lending laws.
“Against this backdrop, the CFPB took action to protect consumers by adding discrimination as an ‘unfair’ practice in violation of the Consumer Financial Protection Act and providing its examiners with authority to examine financial institutions for compliance with this law. In a grievously disappointing turn of events, many of the financial institutions and trade associations who had pledged resources to fight economic injustice in the aftermath of the horrific murders of Mr. George Floyd and Ms. Breonna Taylor then banded together to ask the federal court to strike down the CFPB’s use of its statutory authority. A federal court has now ruled that the CFPB may not pursue any examination, supervision, or enforcement action against a member of the plaintiff organizations (including the American Bankers Association, the Consumer Bankers Association, and the U.S. Chamber of Commerce) with respect to the interpretation of ‘unfairness’ to include discrimination.
“We are deeply troubled by the actions of the court as well as the plaintiffs in this case. We applaud the CFPB for using the full extent of its authority to address and eliminate unfair and discriminatory practices. NFHA will continue to work with our allies to lift up communities of color and ensure that financial opportunities are fair and free from discrimination.”
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The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.