Fair Lending for All Act would create a new Office of Fair Lending Testing within the Consumer Financial Protection Bureau (CFPB) to test lenders’ compliance with the Equal Credit Opportunity Act (ECOA) through undercover “testing” by individuals posing as prospective borrowers. Violations identified in testing could be referred to the Attorney General for action. The bill would strengthen ECOA by expanding protected classes (including race, color, religion, national origin, sex including sexual orientation and gender identity, marital status, age, ZIP Code or census tract, income from public assistance) and by replacing certain terms (e.g., “applicant” with “person”) to broaden who is protected and who can sue. It would introduce criminal penalties for ECOA violations, including individual penalties and enhanced penalties for patterns or practices, with potential personal liability for executives. The act also adds new enforcement tools, requiring the CFPB to review loan applications and processes to ensure ECOA compliance, and expands mortgage data collection to capture a broader set of demographic information, including ZIP Codes, race, ethnicity, sex, sexual orientation, gender identity, and age, while addressing privacy considerations. Overall, the bill aims to expand fair-lending protections, strengthen enforcement, and increase transparency in lending data.
Key Points
- 1Establishment of the Office of Fair Lending Testing within the CFPB to conduct undercover testing of lenders’ ECOA compliance, with violations referred to the Attorney General for action.
- 2Expanded ECOA protections and terminology changes, including prohibitions against discrimination based on ZIP Code/census tract, sexual orientation, gender identity, and a broader set of personal characteristics; replaces “applicant” with “person” and expands definitions to cover aggrieved individuals.
- 3New criminal penalties for ECOA violations, including fines and possible imprisonment, plus heightened penalties for pattern-or-practice violations and personal liability for executives or board members who direct or cause such violations.
- 4New enforcement tool under CFPA: the Bureau would review loan applications and processes of covered entities to ensure ECOA and other federal consumer-financial-law compliance, with authority to prohibit practices and impose enforcement actions.
- 5Expanded mortgage data collection under HMDA to include ZIP Code, census tract, income, race, color, religion, national origin, sex, marital status, sexual orientation, gender identity, and age; provisions to protect privacy while enabling necessary data collection.