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Credit Discrimination: 12.4.1.2 Dodd-Frank Act May Authorize State ECOA Enforcement

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”)55 provides for state attorney general enforcement of “provisions of this title [Dodd-Frank Title X] or regulations issued under this title,”56 effective July 21, 2011.57 Under 12 U.S.C. § 5536(a)(1)(A), a violation of a federal consumer financial law is also a Title X violation.

Credit Discrimination: 12.4.1.4 Parens Patriae

Under a parens patriae theory, a state or local agency acts on behalf of a class of residents of that state or locality to seek relief otherwise available to individuals under state or federal law. In effect, the state is bringing the individuals’ action for them. There is authority allowing state officials to enforce the FHA under the parens patriae doctrine.68

Credit Discrimination: 12.4.2.1 Introduction

State credit discrimination statutes often explicitly authorize state attorney general or other state agency enforcement.119 Such state enforcement is generally not preempted by the federal discrimination laws unless there is a direct conflict between the federal and state discrimination laws.120 For example, in actions by private parties challenging lenders’ reverse redlining practices, the courts have often allowed the cases to proceed under state anti-discrimination laws in conjunction wi

Credit Discrimination: 12.4.2.3.1 Introduction

Assuming that the National Bank Act does not preempt the application of state credit discrimination statutes to national banks or federal thrifts, the question still remains whether only the OCC can investigate compliance with and enforce those state laws or whether state or local agencies can do so as well. The question is whether state investigation or enforcement constitutes an exercise of “visitorial powers” and thus interferes with the exclusive examination and supervision powers of the OCC.

Credit Discrimination: 12.4.2.3.2 Supreme Court’s Clearing House decision

In its decision in Cuomo v. Clearing House Association, L.L.C.,133 the Supreme Court considered the extent to which states can investigate and enforce state anti-discrimination laws against national banks. The case involved actions by the state of New York to enforce its non-preempted fair lending laws against several national banks.

Credit Discrimination: 12.4.2.3.3 Dodd-Frank Act codifies Clearing House and extends it to savings and loan associations

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) codifies the Supreme Court’s decision in Clearing House139 by expressly amending the National Bank Act (NBA) to provide that the limitation on the states’ exercise of “visitorial powers” over national banks must not be construed to limit the authority of states to bring actions to enforce non-preempted state laws.140 State attorneys general and regulators can enforce non-preempted state laws through jud

Credit Discrimination: 12.4.2.3.5 Implications of Clearing House and Dodd-Frank Act codification

Clearing House and the Dodd-Frank Act’s codification of that ruling now mean that a state cannot launch an investigation of discriminatory lending practices by issuing an administrative subpoena to a national bank or federal savings association, nor can it go to court to enforce the administrative subpoena.149 However, after initiating a formal lawsuit against a national bank or federal savings association, the state can seek the same information with the aid of discovery tools, including subpoenas.

Credit Discrimination: 12.4.2.3.7 State investigatory authority upon referral from HUD

Another way in which state agencies can investigate discriminatory practices of any lender under their state laws is through a referral from the Department of Housing and Urban Development (HUD). Under certain circumstances, the FHA requires that HUD initially refer discrimination complaints to state agencies for investigation and enforcement.

Credit Discrimination: 12.4.3 Examples of State and Local Enforcement

In the years leading up to and during the financial crisis that began in 2007, offices of state attorneys general were among the few governmental entities that attempted to take effective action against the discriminatory lending practices of the nation’s largest financial institutions.166 In Illinois v.

Credit Discrimination: Introduction and Listing of Provisions

This appendix section reprints the Home Mortgage Disclosure Act, as amended by Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (July 21, 2010). This revised act is effective on July 21, 2011. See Pub. L. No. 111-203, § 1100H, 124 Stat. 1376, 2113 (changes effective on the designated transfer date); 75 Fed. Reg. 57,252 (Sept. 20, 2010) (establishing July 21, 2011, as the designated transfer date).

Title 12—Banks and Banking

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Credit Discrimination: § 2801. Congressional findings and declaration of purpose

(a) Findings of Congress

The Congress finds that some depository institutions have sometimes contributed to the decline of certain geographic areas by their failure pursuant to their chartering responsibilities to provide adequate home financing to qualified applicants on reasonable terms and conditions.

(b) Purpose of chapter

Credit Discrimination: § 2802. Definitions

For purposes of this chapter—

(1) the term “Bureau” means the Bureau of Consumer Financial Protection;

(2) the term “mortgage loan” means a loan which is secured by residential real property or a home improvement loan;

(3) the term “depository institution”—

(A) means—

Credit Discrimination: § 2804. Enforcement

(a) Regulations

The Bureau shall prescribe such regulations as may be necessary to carry out the purposes of this chapter. These regulations may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Bureau are necessary and proper to effectuate the purposes of this chapter, and prevent circumvention or evasion thereof, or to facilitate compliance therewith.

Credit Discrimination: § 2807. Report

The Bureau, in consultation with the Secretary of Housing and Urban Development, shall report annually to the Congress on the utility of the requirements of section 2803(b)(4) of this title.

[Pub. L. 98-181, tit. VII, § 701(b), 97 Stat. 1266 (Nov. 30, 1983); Pub. L. No. 101-73, tit. XII, § 1211(h), 103 Stat. 526 (Aug. 9, 1989); Pub. L. No. 111-203, tit. X, § 1094(1), 124 Stat. 2097 (July 21, 2010)]

Credit Discrimination: § 2810. Disclosure by Secretary; commencement, scope, etc.

Beginning with data for calendar year 1980, the Secretary shall make publicly available data in the Secretary’s possession for each mortgagee which is not otherwise subject to the requirements of this chapter and which is not exempt pursuant to section 2805(b) of this title (and for each mortgagee making mortgage loans exempted under section 2803(g) of this title), with respect to mortgage loans approved (or for which completed applications are received) by the Secretary for insurance under title I or II of the National Housing Act [12 U.S.C.

Student Loan Law: 34 C.F.R. § 600.1 Scope.

This part establishes the rules and procedures that the Secretary uses to determine whether an educational institution qualifies in whole or in part as an eligible institution of higher education under the Higher Education Act of 1965, as amended (HEA). An eligible institution of higher education may apply to participate in programs authorized by the HEA (HEA programs).

[59 Fed. Reg. 22,336 (Apr. 29, 1994)]