Attorney General Kwame Raoul has led a group of 20 attorneys general in submitting a letter to the Consumer Financial Protection Bureau (CFPB) expressing strong opposition to proposed changes to regulations under the Equal Credit Opportunity Act (ECOA). The coalition argues that these changes would weaken protections against discrimination in credit markets and violate the Administrative Procedure Act (APA).
The attorneys general assert that the CFPB’s Notice of Proposed Rulemaking seeks to rescind ECOA regulations addressing disparate impacts of discrimination. They also note that the proposed rule would alter regulations concerning discouragement of consumers from applying for credit.
Raoul stated, “Anyone applying for credit deserves fair treatment in lending based on creditworthiness, not the color of the applicant’s skin, age, gender or marital status. I will continue to work with my colleagues to stop unfair treatment in the credit market and fight to uphold common sense policies to avoid any and all discrimination.”
The coalition emphasizes that amendments made to the ECOA in 1976 established a national policy prohibiting denial of credit based on characteristics unrelated to an applicant’s ability to repay. These protections have included remedies for discriminatory effects arising from a creditor’s practices, even if such discrimination is unintentional.
In their letter, Raoul and his counterparts argue that current regulations help ensure equal access to credit regardless of race, color, religion, national origin, sex, age or marital status. They warn that instead of reducing discrimination, the CFPB’s proposed changes could increase it and negatively impact Americans who may be denied fair access to credit.
The attorneys general contend that the proposed revisions violate the APA for several reasons: they state that ECOA already addresses disparate impacts; claim consumers would lose broad anti-discrimination protections if disparate impact is removed as a factor; assert disparate impact liability is lawful under anti-discrimination statutes; argue changes regarding discouragement are contrary to law; say revisions will harm applicants and enforcement efforts; and consider imposing harms without proof as arbitrary.
Attorneys general from Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington joined Raoul in signing the letter.