Published

September 30, 2022

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The Chamber and the business community oppose discrimination and agree it has no place in the marketplace. 

We also support the rule of law and are steadfast in our position that government agencies must be held accountable to the laws Congress passes. That’s why we sued the Consumer Financial Protection Bureau (CFPB). Unfortunately, after we recently sued to keep the CFPB accountable to the rule of law, a political attack dog group mischaracterized our position and alleged that the business community is against anti-discrimination provisions. Nothing could be further from the truth.

CFPB skirts Congressional authority

Congress has specifically prohibited discrimination in the consumer banking and financial services sectors with laws like the Equal Credit Opportunity Act, the Fair Housing Act, and the Home Mortgage Disclosure Act. Various federal agencies enforce these laws. When Congress created the CFPB, it did not include discrimination in the charge to the agency to police unfair, deceptive, or abusive acts or practices, leaving that instead to existing discrimination statutes.

The CFPB ignored this fact and chose to write its own rules. Not in a transparent way that allows for public comment, but by editing a manual for examiners charged with enforcing Bureau regulations. This makes it difficult for businesses to even understand the rules.

Discrimination vs. 'disparate impact'

The CFPB claims, for example, that it has the authority to prohibit “unfair” acts or practices to impose “disparate impact” liability on financial products. Disparate impact refers to different outcomes for protected classes, despite no intent to discriminate.

In its manual, the agency provided almost no instruction on what classes would be protected and what would constitute discrimination or disparate impact under its new legal theory. The result is legal uncertainty for financial services companies, as they can’t predict what the Bureau will declare legal or illegal under its undefined standard. This means businesses will reduce the products they offer, and consumers will have fewer choices of financial products. Read about how no-fee checking accounts might, for example, be found to violate the CFPB’s new rules here.

Bottom line: The CFPB is pursuing an ideological agenda that goes well beyond what is authorized by law and is acting without any accountability to the public. The business community is committed to working with government agencies and policymakers to root out barriers to equality of opportunity. However, we will not stand by and allow agencies to ignore the will of Congress and rewrite rules of their own choosing based on political preferences. That is a simple abuse of power.