The Federal Trade Commission (FTC) has sent its annual update to the Consumer Financial Protection Bureau (CFPB) regarding its enforcement of the Equal Credit Opportunity Act (ECOA). In the update letter, the FTC indicated its intent to apply greater scrutiny to every stage of the lending process using ECOA.
The letter, which is intended to update CFPB on the FTC’s enforcement activities regardingECOA, highlighted an amicus curiae brief filed by FTC along with Department of Justice, CFPB, and the Federal Reserve Board, in the Seventh Circuit case of John Fralish v. Bank of America. The agencies’ brief sought to encourage the court to overturn a district court’s ruling that ECOA protections conclude as soon as credit has been extended to the applicant.
The agencies requested the court to extend the protections through the entirety of the credit application process and to those who have previously sought and have since received credit. The agencies hope that extensions to the ECOA will provide further enforcement opportunities throughout and beyond the lending process.
The FTC letter also pointed out other areas where enforcement actions have increased. Particularly in areas relating to communities of color and the military. The letter references a number of ongoing enforcement actions and court cases that the FTC is party to for ECOA actions meant to protect Black and Hispanic individuals from discrimination as well as military individuals being subject to discrimination, fraud, and other adverse actions by lenders. These actions served as a mere sample of FTC actions over the past year.
Lastly, the letter highlighted educational actions being taken by the FTC to help both consumers and businesses better understand and comply with ECOA. These education actions indicate areas that the FTC is likely to begin stricter enforcement in the future. This includes applying ECOA to protect members of the LGBTQ+ community from discrimination in lending; and imposing stricter scrutiny on the use of artificial intelligence and algorithms in lending services.