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#2270253 - 05/10/22 03:35 PM CFPB on AAs, fair lending, and applicants
Compliance Poster Offline
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Joined: Sep 2001
Posts: 418
I’m interested in your thoughts on and implications of the CFPB’s advisory opinion/interpretive rule published yesterday on fair lending laws, adverse actions, and applicants. For example, I’ve mostly considered adverse actions in terms of credit lines as requiring denial notices. It looks like that a revocation or any adverse change in an existing credit would trigger a denial notice, regardless if closed-end or open-end.

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Fair Lending
#2270256 - 05/10/22 03:51 PM Re: CFPB on AAs, fair lending, and applicants Compliance Poster
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,675
Galveston, TX
I have not read that, but what you described is adverse action under the regulation. An unfavorable change in the terms of an account that does not affect all or substantially all of a class of the creditor's accounts has always been adverse action.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2270273 - 05/10/22 06:31 PM Re: CFPB on AAs, fair lending, and applicants rlcarey
Compliance Poster Offline
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Joined: Sep 2001
Posts: 418
I was curious on what prompted this advisory opinion. I see in reading through a 12-2021 amicus brief, below, of the CFPB, where a district court held that ECOA’s protections apply only during the process of requesting credit and do not protect those with existing credit accounts. The CFPB advisory opinion reflects the same text in its court our submission, and rejects opinions by district courts (“No court of appeals has endorsed these district courts’ narrow reading. These district court decisions read “applicant” in isolation instead of reading this statutory term in context, as required by the Supreme Court. …….”)

CFPB Amicus Brief (Fralish v Bank of America)

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#2270274 - 05/10/22 06:41 PM Re: CFPB on AAs, fair lending, and applicants Compliance Poster
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,675
Galveston, TX
Because the CFPB did not want lenders falling into a trap by following the absolutely stupid district court ruling.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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