On March 16, 2022, the Consumer Financial Protection Bureau (“CFPB”) updated the section of its examination manual covering unfair, deceptive, or abusive acts or practices (“UDAAP”). The changes are almost exclusively focused on inserting language addressing “discrimination” as an unfair practice and providing related guidance to examiners. The manual updates reflect an expansive—and as yet legally untested—view that the unfairness doctrine provides the CFPB with authority to examine for and bring enforcement actions based on discrimination beyond its existing authority under the Equal Credit Opportunity Act (“ECOA”). Under the updates, this authority encompasses (i) all consumer financial products and services, and (ii) a broader universe of persons who provide such products and services than has historically been the case. At the same time, the CFPB does not specify the bases on which discrimination is prohibited, leaving uncertainty as to whether the CFPB intends to focus on the bases prohibited under existing federal fair lending law or also to consider discrimination on other bases. The manual updates also signal that future UDAAP examinations will include close scrutiny of any algorithms used in connection with consumer products and services for potential bias. The CFPB did not publish the updates for public comment.
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