DOJ, CFPB Fair Lending Enforcement Actions Target Credit Card Repayment Programs, Marketing Of Add-On Products
On June 19, the CFPB and the DOJ announced parallel enforcement actions against a federal savings bank that allegedly violated ECOA in the offering of credit card debt-repayment programs and allegedly engaged in deceptive marketing practices in the offering of certain card add-on products. The bank will pay a total of $228.5 million in customer relief and penalties to resolve the allegations.
The CFPB and DOJ charge that the bank excluded borrowers who indicated that they preferred communications to be in Spanish or who had a mailing address in Puerto Rico, even if the consumers met the promotion’s qualifications. The CFPB and DOJ assert that as a result, Hispanic populations were unfairly denied the opportunity to benefit from the promotions, which constitutes a violation of the ECOA’s prohibition on creditors discriminating in any aspect of a credit transaction on the basis of characteristics such as national origin. Read more…