Consumer Watchdog Agency Eyes Discriminatory Lending
The Consumer Financial Protection Bureau has announced its intention to crack down on discrimination by lenders against women and minorities.
On Wednesday the agency -- a centerpiece of President Barack Obama's attempt to reform the nation's financial system -- sent a letter to lenders, which it called "Fair Notice on Fair Lending." In the letter, the CFPB explains that the Equal Credit Opportunity Act "makes it illegal for a creditor to discriminate against any applicant because of race, color, religion, national origin, sex, marital status, age [or] receipt of income from any public assistance program." Credit availability "often determines an individual's effective range of social choice and influences such basic life matters as selection of occupation and housing." Without discrimination-free access to credit, in other words, many consumers will be prevented from accessing housing on equal terms.
"It is important to recognize that this subtle but powerful form of discrimination creates damages that are no less direct than the kind of overt and blatant discrimination that, we hope and assume, is increasingly a relic of a bygone era," said CFPB Director Richard Cordray in a speech to the National Community Reinvestment Coalition, according to Reuters.
"Our economy is in the process of recovering from the worst financial crisis since the Great Depression," Cordray said. "We cannot afford to tolerate practices that either price out or cut off segments of the population -- such as women, the elderly, or communities of color -- from the credit markets."
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