GAO Recommends CFPB Evaluate Trump Era Fair Lending Reorganization

On May 6, 2021, the United States Government Accountability Office—an independent, non-partisan congressional watchdog organization—published a report summarizing its study on the impact of the Consumer Financial Protection Bureau’s reorganization of its fair lending enforcement and supervisory activities.

In 2018, the Trump administration-led CFPB decided to relocate the Office of Fair Lending and Equal Opportunity from the Supervision, Enforcement, and Fair Lending Division to the Office of Equal Opportunity and Fairness, a division within the Office of the CFPB Director that plays no role in enforcement.  GAO found shortcomings in the reorganization process and highlighted that the reorganization likely led to a decrease in fair lending enforcement activity in 2018.  GAO ultimately recommended that the Bureau analyze the effects of the reorganization on its enforcement and supervision of fair lending laws, develop performance goals, and take measures to assess its fair lending activities going forward.

While not binding on the CFPB, GAO’s report is significant as it comes at a time when the current administration has signaled that it is motivated to increase enforcement of fair lending laws. Acting CFPB Director Dave Uejio has committed the Bureau to implementing GAO’s recommendations, and Biden’s CFPB Director nominee Rohit Chopra has similarly expressed that he would focus on fair lending.  Likewise, progressive advocates are using the report as an opportunity to apply increased pressure on the Biden administration to become more active in this area.

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