Joseph Lynyack Comments in Financial Times about the CFPB's Use of Statistics to Probe Lending Claims

As mentioned in: Financial Times
April 19, 2012
On April 19, 2012, the Financial Times reported that the US Consumer Financial Protection Bureau (CFPB), a regulatory agency charged with protecting consumers from abusive lenders, will use statistics to determine whether credit providers are discriminating against minorities and other groups. Specifically, the agency will evaluate potential discrimination claims using so-called "disparate impact" analysis, a legal doctrine holding that regulators may prosecute lenders for allegedly discriminatory effects of their policies if results show that certain classes were treated different than others, even if regulators cannot prove intent.

Pillsbury Finance partner Joseph T. Lynyak, a member of the firm's Financial Services Regulation practice, explained that CFPB's announcement signals a shift in fair lending assessments and enforcement actions.

"The Obama administration is using statistics far more aggressively to prove discrimination in instances where lending practices on their face are neutral," Lynyak said, noting the CFPB's renewed emphasis contrasts with approaches taken by the prior administration of George W. Bush.

Lynyak counsels foreign and domestic banks, savings associations, holding companies, mortgage banking companies and other institutions on a host of regulatory, compliance, policy and corporate matters and is part of Pillsbury’s multidisciplinary team of attorneys advising on the CFPB's regulatory role across banking, retail and other industries.

Read the full Financial Times story here.