Furnisher Duties for Collection Agencies-Creating a Good Compliance Management System

Recent FTC consent orders, as well as the continued focus by the CFPB on credit reporting serve as a good reminder to collection agencies and creditors to carefully scrutinize their FCRA policies and procedures to insure they are in compliance with the FCRA’s Furnisher Rule and the guidelines set forth in 12 CFR 1022, Appendix E.

The Furnisher Rule requires data furnishers to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the consumer information they furnish to a consumer reporting agency.   It’s not enough to simply establish policies and procedures, furnishers should remain nimble reassessing their policies and procedures to insure they remain relevant and reasonably tailored to address potential weaknesses and deficiencies. 

Here are the keys to an effective and compliant policy:

• A robust policy will be tailored to the nature, size and complexity of the furnisher. Furnishers need to make sure their policies match the nature, size, complexity, and scope of their business practice.  We suggest considering the following questions and allow the answers to shape or revise your present policies and procedures:
•  What type of information do you provide?
• What is your role – are you an original creditor? A servicer? A debt buyer? Third party debt collector?
• How often do you furnish information?
• How do you provide the information (i.e. what technology platform is used)?
   
• A robust policy accomplishes the following:
  • Insures information provided is accurate. Your policies and procedures should be designed to insure that your furnishing of information:
    • Accurately identifies the consumer;
    • Accurately identifies relationships to the account;
    • Accurately reflects the  account terms and liabilities;
    • Accurately reflects consumer performance/conduct regarding the account;
    • Is validated by your records (or your client’s) at the time it is furnished;
    • Is reported in a format that minimizes inaccuracies. This can be done by including consumer identification information, relevant dates, and, if applicable, credit limits for accounts.
  • Promotes reasonable investigation procedures and appropriate actions based on investigation outcomes, including accurately updating information about the current status of the account. A robust policy:
    • Provides adequate training to employees who are responsible for investigating and resolving indirect disputes.
    • Provides adequate training to employees regarding direct disputes from the consumer;
    • Requires documenting the actions taken to process, respond or investigate FCRA disputes;
       
    • To the extent the furnisher is a servicer or third party vendor includes procedures and policies concerning communications to the creditor regarding the dispute;
    • Provides for document retention for a reasonable period of time to allow for effective training and auditing
    • Provides for review of all relevant information provided by the consumer;
    • Insures a timely and adequate response to the consumer; and
    • Provides for correction, deleting and updated of all disputed information.
  • Provides for updating information as necessary to accurately reflect the current status of the account or any changes in relationships (i.e., a sale or transfer of the account).
  • Prevents re-aging, duplicative reporting, or other problems that affect the accuracy or integrity of information furnished by having an appropriate system to communicate with CRAs.
  • Provides for regular and robust auditing of accounts to help identify and resolve any systemic weaknesses or trends.
    • Furnishers should verify random samples of information furnished; and
    • Furnishers should randomly and regularly audit random disputes.
  • Provides for a regular and periodic evaluation of:
    • Its own practices;
    • Enforcement trends;
    • Consumer reporting agency practices; and
    • Any other factors which may impact the integrity of information being furnished.
  • Requires the use of standard data reporting  formats and procedures; and
  • Establishes and implements internal controls regarding the accuracy and integrity of furnished information
    
    

The key to any robust compliance management system is to remain flexible and adjust policies and procedures in a timely fashion to address environmental changes as they occur.

District Court Suggests Present Capacity Required for TCPA Claims

A District Court in California has suggested that present capacity is required to establish a claim under the Telephone Consumer Protection Act (the "TCPA").  See Chyba v. Bayview Loan Servicing, LLC, C.A. No. 14-cv-1415, 2016 U.S. Dist. LEXIS 59494 (S.D. Cal. May 3, 2016).  In a dispute with a mortgage servicer, the consumer raised an assortment of claims including the FDCPA and the TCPA.  The only claim left unresolved by the parties' cross motions for summary judgment was the TCPA claim.  Ironically, that's where the court's decision gets interesting. 

With respect to the TCPA, the consumer contended her mortgage servicer made eleven automated calls to her cell phone.  In support of her motion for summary judgment, the consumer filed an affidavit indicating that at the beginning of each call, there was an "artificial time delay."  She also submitted a handwritten call log and pictures of her cell phone's screen showing the mortgage servicer's number.  In response, the mortgage servicer contended that the calls were made from a landline that "cannot be used" for autodialed calls.  The court denied both parties' motions for summary judgment after determining an issue of fact existed as to whether the calls were made by an automated telephone dialing system and ordered the parties to undertake additional discovery on the issue.  Specifically, the court ordered that the discovery should concern "whether the 1300 phone line is able to and did use an automated system to call Plaintiff's cell phone."

As many may recall, one of the hallmarks of the FCC 2015 Declaratory Ruling is the FCC's rejection of a present use or current capacity test to determine whether a dialing system is subject to the TCPA.  The FCC instead held that  capacity of an autodialer is not limited to its current configuration, but also includes its potential functionalities even if it currently lacks the requisite software. The FCC's holding on that issue is one of the key issues on appeal in the D.C. Circuit.  See ACA International v. Federal Communications Commission, Case No. 15-1211 (D.C. Cir. June 10, 2015).   It would appear from Chyba, that at least one judge in the Southern District of California agrees with the appellants in the FCC appeal and believes that the FCC's definition is out of whack with the statutory language of 47 U.S. §227 and the correct analysis is the present capacity.

CFPB Monthly Complaint Report Focuses on Credit Reporting

The CFPB issued its monthly report on consumer complaints this week.  The report is a high level snapshot of trends in consumer complaints. The Report provides a summary of the volume of complaints by product category, by company and by state.  Additionally, it highlights a product type.  As it does monthly, the product “spotlight” rotates monthly. This month’s report highlights credit reporting which was last in the “spotlight” in August 2015.  In its press release, the CFPB confirmed that consumer reporting agencies, including specialty consumer reporting agencies, are a “major focus” for the CFPB. Here are the highlights of this month’s report:

 

• Complaint Volume by Product
  • The three products which yield the highest volume of complaints on a three month average remain debt collection, mortgage and credit reporting;
  • A trend worth noting is that the number of debt collection complaints remains almost flat;
  • For the three month period, student loans indicated the highest increase in change –  48% when compared to 2015; and
  • On a monthly basis, debt collection, mortgage and credit reporting complaints were all down in April compared to March.

• Highlighted Product: Credit Reporting
  • The CFPB notes that, as was the case last August, the overwhelming most common credit reporting complaint in July was incorrect information on credit reports (77% of all credit reporting complaints);
  • The CFPB report indicates that these complaints frequently involved accounts in collection for which the consumer complained were not accurately reflecting the status of the collection;
  • The CFPB report notes that consumers are reporting difficulties with disputing inaccuracies with their credit report.  A lot of these complaints center on issues with customer service. 
  • The report notes that the majority of the complaints the CFPB receives are directed at the three major consumer reporting rather than the furnisher of information; and
  • The Report also notes that the Bureau is receiving complaints against specialty consumer reporting agencies and highlighted complaints involving rental, background and employment screening complaints.  The Report highlights that consumers commonly complain that erroneous information reported by specialty consumer reporting agencies involve identity theft.

 

New Jersey District Court Rules in Favor of Debt Collector

A New Jersey District Court recently ruled in favor of a debt collector and dismissed the consumer’s FDCPA claims.  In Montgomery v. Trident Asset Management, C.A. No. 15-6617, the collection agency sent two collection letters eleven days apart which both contained a thirty day validation notice.  The consumer filed suit alleging that the second letter overshadowed the validation notice in the first letter and therefore violated Section 1692g.  The consumer contended that the two letters left her uncertain as to her thirty day option to effectively dispute the debt.  The collection agency disagreed contending that if anything, the second letter provided the consumer with additional rights.  On dispositive motions, the court agreed with the collection agency holding that “nothing in the FDCPA prohibits a debt collector from giving a debtor more than the requisite 30-day validation period.”

CFPB Rulemaking Agenda Confirms Pay Day Rulemaking is Imminent and Plays its Cards Close as to Debt Collection

The CFPB published an aggressive Spring 2016Rulemaking Agenda this week.  Two big takeaways:  The proposed pay day rules will be published within the next few weeks and the Bureau is not providing much of an update on its debt collection rulemaking.  While no definitive dates were provided, the Agenda does give some insight as to an expected time frame for several hot button issues:

 Payday Lending:   The CFPB has confirmed in its press release related to the agenda that it expects to release the proposed rule in the "next several weeks."  The press release suggests that the proposed rule is likely to require all short term loans take into account the consumer's ability to repay without default or re-borrowing.  The proposed rule is also likely to limit the number of rollovers for a loan, prohibit auto title loans, and place limitations on repayment by bank account draft. 

 

Mortgage Servicing:  The CFPB expects to amend certain aspects of the mortgage servicing rules this summer including enhanced loss mitigation requirements and compliance requirements when a borrower is in bankruptcy. 

 

TRID:  Also consistent with recent statements, the Spring Agenda indicates that the CFPB expects to issue a Notice of Proposed Rulemaking clarifying certain aspects of TRID.  Since it took effect, the mortgage industry has raised a number of concerns with ambiguities in the Loan Estimate and Closing Disclosure.  The NPR is likely to address at least some of those issues.

Prepaid Financial Products:  Last fall, the CFPB indicated it expected to issue its final rule on prepaid financial products in early 2016.  The latest press release indicates that the final rule will be released some time this summer.

 Overdrafts:  In the spring of 2015, the CFPB indicated that they were continuing to conduct additional research to assess whether rulemaking is warranted and did not issue a time table for rulemaking.  Since then, the CFPB does not appear to have made much public headway.  The Spring 2016 Agenda indicates the Bureau is still engaged in pre rule making activities.

Debt Collection:  One of the biggest stories that remains is when a proposed rule as to debt collection will be issued.  The CFPB has not committed to a time line. Prerule activities continue and the industry should be on the lookout for the convening of a SBREFA Panel as the next likely step.  The CFPB indicates that they are engaged in consumer testing initiatives to “determine what information would be useful to consumers to have about debt collection and their debts and how that information should be provided to them.” 

Women owned, Minority owned and Small Business Data Collection: The CFPB is in the early stages of developing rules to require financial institutions to report information about their lending to women-owned, minority owned and small businesses.  The CFPB has indicated a desire to model any data collection after their recently released HMDA Rules.  Prerule activities are in the initial stage and expected to continue through the third quarter of 2016.

Federal Regulators Issue Interagency Guidelines Regarding Deposit Reconciliation Practices

The CFPB and four federal financial regulatory agencies have issued Interagency Guidance Regarding Deposit Reconciliation Practices.  The Guidance comes as a follow up to the consent orders entered into last fall against Citizens Bank N.A., Citizens Bank of Pennsylvania and their parent company, Citizens Financial Group, Inc. regarding deposit discrepancies.   The Guidance makes clear that the agencies have a zero tolerance policy as to deposit discrepancies and expect “financial institutions to adopt deposit reconciliation policies and practices that are designed to avoid or reconcile discrepancies, or designed to resolve discrepancies such that customers are not disadvantaged.”  The agencies expect financial institutions to:

• Effectively manage their deposit reconciliation practices;
• Insure that information provided to customers as to their deposit reconciliation policies is accurate;
• Implement effective compliance management systems that include appropriate policies, procedures, internal controls, training and oversight; and
• Review processes to ensure compliance with applicable laws and regulations.

While the Guidance provides for a zero tolerance policy, financial institutions are reminded that they are not liable for “bona fide errors”.  To establish a bona fide error, a financial institution must establish that a violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.  It is therefore imperative that financial institutions review their compliance management systems to insure they:

• Provide proper vendor management to ensure their service providers and affiliates properly and accurately resolve deposit discrepancies;
• Include written policies and procedures for conducting audits to insure deposits and deposit discrepancies are accurately handled, including the frequency, scope and depth of said audits;
• Put in place compliance measures, as well as policies, procedures and practices, to ensure accurate processing of deposits and deposit discrepancies;
• Incorporate sufficient monitoring and oversight of the processing of deposits and deposit discrepancies;
• Incorporate training of personnel to insure accurate resolution of deposit discrepancies; and
• Incorporate complaint procedures and processing to ensure deposit discrepancy complaints are identified, tracked and resolved in accordance with the Banks’ policies and procedures.

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The CFPB Issues Report Condemning Auto Title Loans

In advance of issuing it’s rulemaking on pay day loans and other short term loans, the CFPB has issued its scathing Report on Single-Payment Vehicle Title Lending. Last year, the CFPB issued its pay day proposal to end “debt traps”. In that proposal, the CFPB proposed eliminating or significantly curtailing short term credit products which were secured by liens on the consumer’s vehicle. Today’s Report is likely to be used in support of the forthcoming rulemaking. Vehicle title loans are allowed in about half of the United States and allow consumers to secure a short term single payment loan using their vehicle’s title as collateral. The vehicle must be owed free and clear and the loan is generally based upon the value of the vehicle.

 

The Report is based upon the CFPB’s examination of nearly 3.5 million loans made in ten states between 2010 and 2013 (the height of the economic crisis). In the Report, the CFPB makes the following key findings:

 

• The average loan was $959 and carried an APR of 317%;
• Of the loans studied, 87% were reborrowed within 60 days;
• The loans have a high rate of default. A majority of the loans are reborrowed and of those, roughly 20% default and end up as repossessions;
• More than half of the loans become long term debt. In other words, over half roll over the loan four times or more; and
• As a result of the high percentage of rollover, loan sizes increase exponentially due to additional fees and interest.

The CFPB is considering a proposal which sets forth two alternative path for lenders to take when dealing with short term credit products: prevention and protection. Short term credit products are defined as being those credit products that would require the consumer to pay back the loan in full within 45 days. Lenders will have the ability to choose one of two business models:  

 

Prevention:

The “prevention” alternative focuses on the consumer’s ability to repay the loan. This alternative requires the lender to make a good faith determination at the outset of the loan as to whether the consumer has an ability to repay the loan when due, including all associated fees and interest, without reborrowing or defaulting. For each loan, the lender would be required to verify the consumer’s income, major monthly financial obligations and borrowing history (with the lender, its affiliates and possibly other lenders). A lender would generally have to comply with a 60-day cooling off period between loans. A second or third loan could only be made within the 60-day cooling off period where the lender could document a change in the borrower’s financial condition. In any event, after three covered short term loans, a mandatory 60-day cooling off period would have to elapse before the lender could make a covered short term loan to the consumer. 

 

Protection:

The “protection” alternative focuses on the repayment options and limiting the number of short terms loans a buyer could take out in any twelve month period. Under this alternative, a lender would not be required to determine the consumer’s ability to repay. Instead, the loan could not: (a) exceed $500; (b) be secured by the consumer’s vehicle; (c) carry more than one finance charge; (d) rollover more than twice; and (e) any rollover would have to taper off. The CFPB is contemplating two “tapering” alternatives. Under the first, the amount of principal on each rollover would taper in such a manner as to prevent an unaffordable balloon payment when the third payment is due. Under the second, the lender would be required to provide a no-cost extension to the consumer if the consumer was not able to pay off the loan in full at the end of the third loan.

  

In its Fall Rulemaking Agenda, the CFPB indicated that its rules on short term loan products were in the proposed rulemaking stage. Many in the industry expect the rules to be published shortly.

 

 

 

Supreme Court Rules in FDCPA case

Today, the Supreme Court unanimously reversed the Sixth Circuit in Sheriff v. Gillie, Docket No. 15-338, holding that letters sent on the Ohio Attorney General’s letterhead by private debt collectors are neither deceptive nor misleading.  While we are still digesting the opinion as to its long term import, here are our initial impressions:

Background

In Sheriff, the Ohio Attorney General appointed private law firms as “special counsel” to collect debt on the state’s behalf. When communicating with the debtors, the Ohio Attorney General required special counsel to use letterhead with the Attorney General’s Office logo and Attorney General’s name on it.  With regard to each of the letters in question, the signature block identified the private attorney by name and address and included the designation “special” or “outside” counsel to the State Attorney General.  Moreover, each letter included a statement that the communication was from a debt collector and its purpose was to collect a debt.  The consumers contended that the letters were deceptive and misleading attempts to collect consumer debts and violated the FDCPA.

The District Court granted summary judgment in favor of the debt collectors, holding that special counsel were officers of the state of Ohio and therefore covered under § 1692a(6)(C)’s exemption.  Gillie v. Law Office of Eric A. Jones, LLC, et al., 37 F.Supp.3d 928 (S.D.O.H. 2014).  Further, the Court held that even if the defendants were not exempt from the FDCPA, the statements at issue were not false or misleading.  The Sixth Circuit vacated the judgment concluding that special counsel were not exempt as officers of the state and remanded to the district court for trial on whether the use of the letterhead was misleading. Gillie v. Law Office of Eric A. Jones, LLC, et al., 785 F.3d 1091 (6th Cir. 2015). 

In the Supreme Court

The defendants’ petition to the Supreme Court posed two issues.  First, whether the defendants were exempt from the FDCPA’s coverage as “state officers” and secondly, whether the special counsel’s use of the Attorney General’s letterhead was false or misleading under §1692e.  Assuming for the purposes of argument that special counsel did not qualify as “state officers” for purposes of the FDCPA, the court held that the use of the Attorney General’s letterhead was not false or misleading and did not violate the FDCPA. 

By jumping to the second issue, the Court’s holding has broader implications that it might have otherwise had and yet, it does not address the issue we were all hoping to see addressed: the general liability standard for violations of §1692e. Currently, the circuits are split as to the general liability standard for debt communications. The majority of circuits rely on the least sophisticated consumer standard while other circuits have applied an “unsophisticated consumer.”   While the Court had the opportunity to adopt a singular test applicable across the circuits, it sidestepped the issue. 

Instead, the Court focused generally on whether the use of the Attorney General’s letterhead at the Attorney General’s direction was false or misleading and specifically, on whether it violated 15 USC §§1692e (9) and (14).  Subsection 9 prohibits debt collectors from falsely representing that a communication is “authorized, issued or approved” by a State.  Subsection 14 prohibits debt collectors from using a name other than their true name.  The Court concluded that the letters did not violate either provision.  Since the Attorney General required the use of his letterhead, “[s]pecial counsel create no false impression in doing just what they had been instructed to do.  Instead, their use of the Attorney General’s letterhead conveys on whose authority special counsel write to the debtor.”  Slip Op. 8-9.   Likewise, the Court concluded there was no violation of subsection 14.  “Far from misrepresenting special counsel’s identity, letters sent by special counsel accurately identify the office primarily responsible for collection of the debt…special counsel’s affiliation with that office, and the address…to which payment should be sent.”  Slip Op. at 9.

Key Take Aways

The biggest takeaway is what Sheriff did not do. While it tackled the issue with the broadest ramifications (the §1692e issue), it did not address the liability standard and nowhere is there any mention of the “least sophisticated consumer”.  Instead, the Court focused solely on the language of subsections 9 and 14 in the context of the underlying facts and whether the letters were in fact deceptive or misleading.  The Court concluded that not only was the communication accurate, but also was dismissive of any contention that the communication was deceptive, describing the letters as “milquetoast”. 

The second big takeaway comes from both the opinion and the oral arguments.  In both, the Court demonstrates a very practical approach to the FDCPA and does not appear to be inclined to expand liability under the FDCPA to include far-fetched notions of consumer confusion or intimidation. Instead, by keeping its opinion to the narrow issues presented, the Court appears content to focus on the underlying facts and rely upon the four corners of the statute, interpreting the Act in a practical and narrow manner, giving meaning to the Congressional intent of the Act.



Telephone Messaging Case Certified for Interlocutory Appeal

Perhaps the Eastern District of New York has finally had enough of the telephone messaging conundrum.  Last week, the Eastern District of New York certified Halberstam v. Global Credit and Collection Corp., 2016 U.S. Dist. LEXIS 3567 (S.D.N.Y. Jan. 11, 2016) for immediate appeal.  As we reported in an earlier post, in Halberstam, the debt collector’s call was answered by a third party who asked if he could take a message.  The debt collector responded as follows:

Name is Eric Panganiban.  Callback number is 1-866-277-1877…direct extension is 6929.  Regarding a personal business matter.

The issue as couched by the court was whether under the Fair Debt Collection Practices Act, a debt collector, whose telephone call to a debtor is answered by a third party, may leave his name and number for the debtor to return the call, without disclosing that he is a debt collector, or whether the debt collector must refrain from leaving callback information and attempt the call at a later time.  The court concluded that the message violated the FDCPA’s general prohibition on third party communications.   In so holding, the court determined that soliciting a call back is a “communication in connection with the collection of a debt.”  “In our case…the only purpose of…[the] call was quite obviously to collect the debt, and anyone, regardless of their level of sophistication, who knew that the call came from a collection firm would understand that purpose.” Halberstam at *9-10. 

Last week, the district court certified the matter for an interlocutory appeal to the Second Circuit.  In doing so, the court recognized the potential impact the issue has for the entire debt collection industry and noted that the defendant’s policy for leaving messages is a standard practice of many collection agencies to leave nonspecific call-back messages with third parties.  Additionally, the court appeared troubled that the “technical violation at issue will likely have a far greater benefit to the plaintiffs’ FDCPA bar than it will have in protecting debtors from abusive debt collection practices.”

Senate Committee to Conduct Hearing on the TCPA

At the request of several financial services organizations, the Senate Committee on Commerce, Science and Transportation will convene a full committee hearing on the TCPA and its impact on consumers and business on May 18th.  According to the Committee's website, the hearing will examine the TCPA, the FCC 2015 Ruling (which is currently being appealed in the DC Circuit) and the application of the TCPA to new technologies which have arisen since the Act's adopting in 1991. 

TRID Update: More Changes Coming

In a recent letter to the industry, the CFPB acknowledged the continuing operational challenges presented by TRID, as well as the need for greater certainty and clarity within the rule itself.  In keeping with that, the CFPB has indicated that has begun drafting a Notice of Proposed Rulemaking (NPRM) which will incorporate some of the Bureau's existing informal guidance and provide greater clarity.  The CFPB expects to issue the NPRM this summer.  In the meantime, the CFPB continues to provide assurances that they and other regulators continue to focus their examinations on good faith efforts to come into compliance with TRID. 

CFPB Issues Annual Fair Lending Report

The CFPB has issued its annual Report summarizing its fair lending activities in 2015. The Report is comprehensive and lays out not only the activities of the Bureau but also its methodology in reviewing fair lending issues. For those not familiar, the Dodd Frank Act established an Office of Fair Lending and Equal Opportunity within the CFPB and charged it with “providing oversight and enforcement of Federal laws intended to ensure the fair, equal, and nondiscriminatory access to credit for both individuals and communities.” In doing so, the Office’s two primary tools are the Equal Credit Opportunity Act (“ECOA”) and the Home Mortgage Disclosure Act (“HMDA”).

 

While much of the Report has been previously discussed in prior blog entries, the key takeaways for lenders are as follows:

 

• The Bureau uses a risk based prioritization process to focus their enforcement and regulatory efforts on markets or products that represent the greatest risk for consumers. The Report confirms the Bureau is currently honed in on four products:
•  Mortgage Lending. Mortgage lending is a priority for the Office and they continue to focus on the HMDA data to identify risks in the areas of redlining, underwriting and pricing. In 2015, the Bureau resolved two public enforcement actions involving mortgage lending. 
• Indirect Auto Lending. The Report confirms that the Office remains focused on indirect auto lending and is conducting auto finance targeted ECOA reviews which generally include examination of three areas: credit approvals and denials, interest rates quoted by the lender to the dealer (“Buy Rates”) and any discretionary markup or adjustments to the Buy Rate. In 2015, the Bureau resolved two public enforcement actions involving discriminatory pricing and compensation.  
• Credit Cards. The Report suggests that this is a product which is receiving increased fair lending scrutiny. The Report indicates that the Bureau is “focused in particular on the quality of fair lending compliance management systems and on fair lending risks in underwriting, line assignment, and servicing,” including the treatment of consumers who indicate a preference to speak Spanish. 
• Small Business Lending. The Report indicates that the Bureau has begun targeted ECOA reviews of small-business lending and is focused on the quality of fair lending compliance management systems and on fair lending risks in underwriting, pricing and redlining.
• The Bureau is conducting three types of fair lending reviews:
• ECOA Baseline Reviews. The CFPB uses ECOA Baseline Reviews to evaluate how well an institution’s compliance management system identifies and manages fair lending risks. To this end, the Bureau updated their Baseline Review Modules in the CFPB Supervision and Enforcement Manual.
• ECOA Targeted Reviews. The CFPB uses Targeted Reviews to evaluate areas of heightened fair lending risks and generally focus on a specific line of business, including those identified above.
• HMDA Data Integrity Reviews. The CFPB makes no bones about it. HMDA data is a primary tool used to identify redlining issues.
•  The Report also summarizes the Bureau’s pending investigations:
• Mortgage Lending. The Report makes it abundantly clear that mortgage lending is among the Bureau’s top priorities and has focused its fair lending enforcement efforts on redlining practices. Currently, the Report indicates that it has a number of authorized enforcement actions in settlement negotiations and pending investigations.
•  Indirect Auto Finance. Similarly, the Bureau has prioritized discrimination resulting from discretionary loan pricing. The Report indicates the Bureau currently has a number of pending enforcement actions and several authorized enforcement actions in settlement negotiations.
• The Report also summarizes the new HMDA rule and indicates that the Bureau is in the pre rulemaking stage with respect to developing rules as to the collection of small business lending data as required by the Dodd Frank Act.