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Joint Trades Call on CFPB to Rescind Revised Examination Manual

New White Paper Details Why CFPB Lacks Legal Authority for Recent Actions


In a legal analysis shared with the Consumer Financial Protection Bureau today, the American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America and the U.S. Chamber of Commerce reaffirm their view that discrimination has no place in the financial services marketplace, while detailing why recent Bureau actions to expand its examination of banks for discrimination exceeds the Bureau’s legal authority. The associations offer to work with the CFPB and Congress to address these issues and ensure the Bureau follows the law.

In the joint white paper, entitled Unfairness and Discrimination: Examining the CFPB’s Conflation of Distinct Statutory Concepts, the groups call on the CFPB to rescind its recent "update" of its examination manual, and they explain why the Bureau lacks the legal authority to examine financial institutions for alleged discriminatory conduct under its “unfair, deceptive, and abusive acts or practices” (UDAAP) authority.   

The analysis concludes that the new manual and related CFPB actions are "contrary to law and subject to legal challenge" as well as potential congressional action under the Congressional Review Act. The groups note that the Bureau’s recent actions have “tremendous implications for consumers, for banks, and for financial markets at large."  

"It represents an enormous self-expansion of the CFPB’s authority that stands contrary to law and the intent of Congress,” the groups write. “Such sweeping changes that alter the legal duties of so many are the proper province of Congress, not of independent regulatory agencies, and the CFPB cannot ignore the requirements of the Administrative Procedures Act and Congressional Review Act. The CFPB may well wish to 'fill gaps' it perceives in federal antidiscrimination law. But Congress has simply not authorized the CFPB to fill those gaps. If the CFPB believes it requires additional authority to address alleged discriminatory conduct, it must obtain that authority from Congress, not take the law into its own hands. The associations and our members stand ready to work with Congress and the CFPB to ensure the just administration of the law." 

Throughout many decades, Congress never used two statutory concepts, “unfairness” on the one hand, and “discrimination” on the other, interchangeably, according to the white paper. Rather, they are distinct, and each has a well-established meaning and scope of application. However, on March 16, the CFPB “conflated the concepts by announcing – via a UDAAP exam manual “update” – that it would begin examining financial institutions for alleged discriminatory conduct that it deemed to be ‘unfair’ under its ‘unfair, deceptive, and abusive acts or practices’ (UDAAP) authority.”  

Read the Letter to CFPB Director Chopra Accompanying the White Paper

Read the White Paper


About the American Bankers Association

The American Bankers Association is the voice of the nation’s $24 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $19 trillion in deposits and extend $12.4 trillion in loans.

About the Consumer Bankers Association

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.

About the Independent Community Bankers of America

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

About the U.S. Chamber of Commerce

The U.S. Chamber of Commerce is the world’s largest business organization representing companies of all sizes across every sector of the economy. Our members range from the small businesses and local chambers of commerce that line the Main Streets of America to leading industry associations and large corporations. They all share one thing: They count on the U.S. Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, we have advocated for pro-business policies that help businesses create jobs and grow our economy.

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CBA Media Contact: Billy Rielly

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U.S. Chamber of Commerce Media Contact: Kathleen Ward

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Independent Community Bankers of America Media Contact: Aleis Stokes

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