A Revived Disparate Impact Doctrine Under Biden's CFPB

Law360 (February 17, 2021, 3:26 PM EST) -- The Consumer Financial Protection Bureau is expected to undergo significant changes under President Joe Biden. We anticipate that, among those changes, the CFPB will scrutinize lending practices that result in racial disparities, and will revive the "disparate impact" doctrine to pursue such practices as violations of the Equal Credit Opportunity Act.

Under former President Barack Obama, the CFPB applied the doctrine aggressively, including where disparate racial impact was unintentional. The CFPB did not assert the doctrine under former President Donald Trump, but we expect that Biden's CFPB will revive it as a key piece of its ECOA enforcement agenda.

The doctrine...

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