Does ECOA require the CFPB to refer matters to the DOJ when there is a pattern of discouragement or denial?

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The correct answer is that the Equal Credit Opportunity Act (ECOA) does not mandate the Consumer Financial Protection Bureau (CFPB) to refer matters to the Department of Justice (DOJ) when there is a pattern of discouragement or denial. While ECOA does provide a framework for addressing discriminatory practices in lending, the referral to the DOJ is not an automatic requirement based solely on observed patterns of discouragement or denial.

The CFPB has the authority to enforce ECOA and can take several actions, including investigations and compliance examinations. However, the decision to refer a case to the DOJ is contingent upon various factors such as the severity and nature of the violation, rather than a blanket requirement tied to patterns of discouragement or denial. Referral to the DOJ typically occurs for more significant violations that may require federal intervention.

This understanding highlights the nuanced enforcement mechanisms under ECOA, demonstrating that while the CFPB plays a critical role in addressing discrimination in lending, it has discretion regarding how to proceed with enforcement actions, which is not universally applicable to all instances of discouragement or denial.

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