The Consumer Financial Protection Bureau and Justice Department reached a memorandum of understanding last week that enhances cooperative enforcement of fair lending standards and prevents regulatory overlap.
“The Department of Justice welcomes the new tools and resources the CFPB can bring to the fight against lending discrimination,” Thomas Perez, the assistant attorney general for the civil rights department, said. “Cooperation between our two agencies promotes strong and effective civil rights enforcement, and today’s agreement will further our ongoing collaborative efforts.”
Under the 2010 Dodd-Frank Act, the CFPB works with the Justice Department and other agencies to promote effective and efficient enforcement of fair lending standards. The CFPB is also authorized, under Dodd-Frank, to conduct join investigations with the Justice Department in matters related to fair lending.
Additionally, both agencies have the authority to protect American consumers from discriminatory lending under the Equal Credit Opportunity Act, which makes it illegal for creditors to discriminate against applications due to religion, race, color, national origin, sex, marital status, age, income or the applicant’s exercise of certain consumer protection rights.
The memorandum of understanding outlines the framework for interagency information-sharing and its confidentiality, the coordination of joint investigations and interagency referrals.
If the CFPB finds that a creditor has engaged in discriminatory lending practices, the agency will refer the case to the Justice Department. The agencies agreed to notify one another throughout various stages of enforcement action.