WASHINGTON—The Consumer Financial Protection Bureau has modified Equal Credit Opportunity Act (ECOA) regulations to provide additional flexibility for mortgage lenders in the collection of consumer ethnicity and race information.
“These amendments will provide greater clarity for mortgage lenders regarding their obligations under the law, while promoting compliance with rules intended to ensure consumers are treated fairly,” the Bureau said.
Separately, the CFPB is also seeking comment on proposed policy guidance describing the Home Mortgage Disclosure Act (HMDA) data the Bureau proposes to make available to the public beginning in 2019, including modifications to protect consumers’ privacy.
“The Home Mortgage Disclosure Act helps shine a light on how consumers are treated in the nation’s largest consumer financial market,” said CFPB Director Richard Cordray. “The Consumer Bureau is committed to promoting fair lending and protecting consumer privacy, and will continue working to ensure that the rules work as intended.”
The Equal Credit Opportunity Act is a federal civil rights law that protects against discrimination in the financial marketplace. Regulation B, the CFPB’s rule implementing ECOA, includes restrictions regarding lenders’ ability to ask consumers about their race, color, religion, national origin or sex, except in certain circumstances. These circumstances include required collection of the information for some mortgage applications under Regulation B.
The changes finalized this week, initially proposed in March, will provide compliance flexibility for individual mortgage lenders, and also support the broader mortgage industry’s ability to use consistent forms and compliance practices, the CFPB said. Mortgage lenders will not be required to maintain different practices depending on their loan volume or other characteristics, allowing more lenders to adopt application forms that include expanded requests for information regarding a consumer’s ethnicity and race, including the revised Uniform Residential Loan Application.
The Bureau also finalized other amendments to Regulation B and its commentary to facilitate compliance with Regulation B’s requirements for the collection and retention of information about the ethnicity, race, and sex of applicants seeking certain types of mortgage loans.
The final rule on ECOA issued today is available at: http://files.consumerfinance.gov/f/documents/201709_cfpb_final-rule_regulation-b.pdf