Rhode Island Attorney General Peter F. Kilmartin today joined a coalition of 14 attorneys general urging the Consumer Financial Protection Bureau (CFPB) and Acting Director Mick Mulvaney to continue protecting the rights of consumers against credit discrimination under the Equal Credit Opportunity Act (ECOA).
The attorneys general share authority with the CFPB to enforce regulations about the ECOA and lead antidiscrimination efforts in their own states. As such, they are advising that the CFPB continue enforcing the ECOA, including its provision for disparate impact liability.
"It is alarming that CFPB Director Mulvaney has indicated the agency is considering rolling back its responsibility to enforce nondiscriminatory lending requirements under the Equal Credit Opportunity Act and this appears to be another effort to undermine the power and authority of the CFPB in protecting consumers," said Attorney General Peter F. Kilmartin.
The ECOA is the principle federal antidiscrimination law for all forms of credit except home mortgage lending. It prohibits creditors from discriminating against consumers on the basis of race, color, religion, national origin, sex, marital status, and age. The ECOA also protects people from discriminatory intent and unconscious prejudices that do not mention race, color, religion, national origin, sex, marital status, or age, but still have a discriminatory effect that prevents equality of opportunity. This is called disparate impact liability. The CFPB is charged with oversight and enforcement of federal laws relevant to nondiscriminatory lending and credit practices, which includes interpreting the ECOA.
The Supreme Court's 2015 ruling in the case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. dictated that the text of the ECOA provides for disparate impact liability, and numerous courts have continued to recognize disparate impact claims under the ECOA. In their letter, the Attorneys General say they "will not hesitate to uphold the law if CFPB acts in manner contrary to law with respect to interpreting ECOA."
Attorney General Kilmartin is joined in sending this letter by the attorneys general of Massachusetts, California, Minnesota, Washington, D.C., North Carolina, New Jersey, Illinois, New York, Maine, Oregon, Maryland, Vermont, and Virginia.