45 THE NAFCU JOURNAL JULY–AUGUST 2022 a defense or whether they would consider such discrimination to be outweighed by the credit union’s business purpose. What types of discrimination will be covered? The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending based on specific bases. Specifically, creditors are prohibited from discriminating against a consumer on the basis of race, color, religion, national origin, sex, marital status, or age. While ECOA spells out the types of discrimination that are prohibited, unfortunately neither the CFPB’s press release nor the Guide explicitly discuss what types of discrimination are covered under the CFPB’s new stance. However, they both discuss ECOA and it appears that the CFPB may be targeting discrimination based on ECOA’s protected classes. However, until the CFPB states otherwise, credit unions may not want to assume that the CFPB will limit itself to ECOA's prohibited bases. Credit unions may want to keep in mind that ECOA is not the only federal anti-discrimination law. For example, NCUA’s non-discrimination in real estate regulation prohibits discrimination based on familial status, a basis that is not prohibited by ECOA. It may not seem important to know what types of discrimination the CFPB will focus on, as most credit union professionals do not want to discriminate against members in the first place. However, understanding the Bureau’s focus can help credit unions consider the likelihood that existing policies create a risk of discrimination. Many times, credit unions are unaware that a policy is discriminatory and has created a disparate impact. However, if a credit union knows what to look for, they can review their programs to see if they are treating members differently based on a particular characteristic. If a credit union does not know what types of discrimination to look out for, it will be harder to check to see if their policies have created a disparate impact. To analogize, it will be hard for a credit union to examine its policies to see if they create a disparate impact for members who are lefthanded if they do not know they need to take a member’s dominant hand into account. As noted above, this change in the CFPB’s stance is significant. Credit unions may want to start looking at their policies, practices, and procedures for non-credit financial products and services to assess their UDAAP risk under the CFPB’s recent guidance. Ultimately, credit unions may want to speak with experienced local counsel to determine how the CFPB’s new stance will affect their business. As always, do not hesitate to reach out to NAFCU’s regulatory compliance team with any questions—we’re here to serve you. Keith Schostag is regulatory compliance counsel for NAFCU. “In addition to specific non-discrimination laws that mainly target lending practices, credit unions will need to consider discrimination in relation to share accounts, debit cards, ACH transfers, and everything in between. This is a serious change in the CFPB’s stance on UDAAP and discrimination.” Index to Advertisers AI Oasis Website: ai-oasis.com......................................... C3 Allied Solutions Website: alliedsolutions.net...............................19 FIS Website: fisglobal.com.........................................41 Gallagher Website: nafcu.org/gallagher........................... 37 Origence Website: origence.com.......................................... 7 SageNet Website: sagenet.com/engaged..................... C2 SentiLink Website: sentilink.com........................................... 4 TruStage Website: cunamutual.com/auto...................... C4
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