Although always a significant focus of consumer lending, recent regulatory actions and pronouncements illustrate the sharp focus fair lending issues are receiving by both federal financial regulators and research bureaus. When considered collectively, these actions serve as an important reminder for all providers of consumer credit (including insured depository institutions, non-bank consumer lenders, and consumer finance “platforms” that partner with operating consumer lenders) that underwriting and credit modeling, as well as collection practices, must reflect compliance with all applicable laws.
FDIC Action Against Platform Bank
The FDIC recently announced a Consent Order with a New Jersey state-chartered bank that is actively involved in partnering with “fintechs” to provide branded consumer financial products and services to residents throughout the United States (in this way, the fintech partner offers an internet-based “platform” that provides the partner bank’s products and services to consumers who live throughout the United States; for example, XYZ Bank could…