The U.S. Chamber of Commerce, alongside a variety of other business advocacy groups, filed a complaint against the Biden Administration Wednesday morning, alleging that the Consumer Financial Protection Bureau (CFPB) was exceeding its mandate in implementing new anti-discrimination measures.
The new measures, implemented in March, expand the CFPB’s mandate under the Dodd-Frank act to regulate “unfair, deceptive and abusive acts and practices” (UDAAPs), to include cases of discrimination. CFPB Director Rohit Chopra described discrimination as “unambiguously unfair,” in the March announcement, but the Chamber of Commerce alleges that the statutes governing the CFPB “consistently treat “unfairness” and “discrimination” as “distinct concepts,” according to the Chamber of Commerce complaint. (RELATED: House Preps Vote On Bills Targeting China, Big Tech ‘Goliaths’)
“The CFPB is one of the most transparent regulatory agencies, and voluntarily publishes exam manuals laying out how it will assess banks’ compliance with the federal laws Congress charged the Bureau with enforcing,” said a CFPB spokesperson in a statement to the Daily Caller News Foundation. “The CFPB’s exam manuals allow banks to ensure they are following the law, and help make certain that consumers are receiving the fair and equitable treatment they deserve.”
While the CFPB can already target discriminatory practices in cases such as lending, “discrimination may meet the criteria for “unfairness” by causing substantial harm to consumers that they cannot reasonably avoid, where that harm is not outweighed by countervailing benefits to consumers or competition,” the CFPB argued in March. “Consumers can be harmed by discrimination regardless of whether it is intentional.”
Recent actions from the @CFPB go beyond what is directed by Congress and will result in fewer financial products, which is why we joined several other groups today in suing the agency to ensure consumers are protected from government overreach. Read more: https://t.co/TxFJxbJuTK pic.twitter.com/KkWsVI95WM
— U.S. Chamber (@USChamber) September 28, 2022
The Chamber argued that disparate impact was a common consequence of normal banking activity, citing no-fee checking accounts as a typical example in its press release. No-fee checking accounts are more often granted to older individuals, since they typically have larger balances as a result of being farther in their careers, a form of disparate impact that the Chamber argues might trigger the new anti-discrimination methods and disincentivize banks from offering such programs.
“The CFPB is pursuing an ideological agenda that goes well beyond what is authorized by law and the Chamber will not hesitate to hold them accountable,” said Executive Vice President and Chief Policy Officer Neil Bradley of the U.S. Chamber of Commerce in the Chamber’s press release.
The U.S. Chamber of Commerce referred the DCNF to June 2022 analysis by the American Bankers Association (ABA), a fellow plaintiff, which noted that the CFPB is charged with enforcing federal laws to ensure “fair, equitable, and nondiscriminatory access to credit,” according to federal statutes. If the two words were meant to overlap, Congress would have specified this, instead of charging the CFPB with enforcing existing anti-discrimination laws and regulations, the ABA argued.
Senate Republicans questioned Chopra on the new regulations in an April hearing, but Chopra argued that the move was consistent with decades of precedent, according to The Wall Street Journal.
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