The CFPB published an updated Examination Manual for Unfair, Deceptive, or Abusive Acts or Practices that expands its focus on acts or practices which amount to discrimination. In announcing the revised examination manual, the CFPB stated it notes, “that discrimination may meet the criteria for ‘unfairness’ by causing substantial harm to consumers that they cannot reasonably avoid, where that harm is not outweighed by countervailing benefits to consumers or competition.”
The revised examination manual provides a framework through which the CFPB will examine the practices of its supervisees to ensure not only technical compliance with consumer protection laws but for acts or practices which result in discriminatory outcomes due to their “unfair”, “deceptive” or “abusive” nature. The CFPB will examine the processes supervised companies use for assessing these risks, and for testing and monitoring their products for discriminatory effects.
The examination focus will include discriminatory effects even where a company is in compliance with consumer protection laws intended to prevent discrimination. For example, the CFPB stated, “Discrimination can be unfair in cases where the conduct may also be covered by ECOA, as well as in instances where ECOA does not apply.”
The updated examination manual was published March 16, 2022 and is in effect on publication. The Examination Manual can be found on the CFPB’s website here and with all other manuals here.
