Banking trade groups have jointly called for the Consumer Financial Protection Bureau to withdraw a revised examination manual which would allow it to scrutinize discriminatory conduct under its authority to enforce the Consumer Financial Protection Act’s prohibition on unfair, deceptive and abusive acts and practices.
The American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America and the U.S. Chamber of Commerce said the CFPB’s efforts to expand its examination of financial institutions for discrimination exceed its legal authority.
In March, the CFPB revised its examination manual for financial institutions to include alleged discriminatory conduct under its UDAAP authority. “When a person is denied access to a bank account because of their religion or race, this is unambiguously unfair,” said CFPB Director Rohit Chopra at the time. “We will be expanding our anti-discrimination efforts to combat discriminatory practices across the board in consumer finance.”
In a white paper analyzing the revision, the trade groups called the new manual and related CFPB actions “contrary to law and subject to legal challenge” as well as potential congressional action under the Congressional Review Act. The agency is inappropriately conflating two distinct statutory concepts by treating possible discriminatory actions as unfair, the groups said.
“It represents an enormous self-expansion of the CFPB’s authority that stands contrary to law and the intent of Congress,” the groups said. “Such sweeping changes that alter the legal duties of so many are the proper province of Congress, not of independent regulatory agencies.”