The Office of Fair Lending and Equal Opportunity, housed within the Consumer Financial Protection Bureau, was stripped of its enforcement powers by the Trump administration as part of acting head Mick Mulvaney's plan to restructure the bureau.
The Office of Fair Lending and Equal Opportunity had penalized lenders that it said had systematically imposed interest rates on minorities that were higher than those for whites.
Now that office, which had been part a powerful CFPB division, will move inside the office of the director, where staffers will be focused on “advocacy, coordination and education,” according to an email Mulvaney sent them this week. They will no longer have responsibility for enforcement and day-to-day oversight of companies, he said.
The move was criticized by civil rights and consumer groups, who say that removing the office's enforcement power means fewer cases will be pursued.
The Office of Fair Lending has pursued some of the CFPB’s most high-profile cases, including a 2015 settlement against Hudson City Savings Bank, a New Jersey-based bank accused of racially discriminating against minority mortgage borrowers. The bank was required to provide $25 million in loan subsidies in what the CFPB called the country’s largest redlining cases.
According to Mulvaney's spokesman, the concerns are unfounded.
“By elevating the Office of Fair Lending to the Director’s Office, we have enhanced its ability to focus on its other important responsibilities,” spokesman John Czwartacki said in a statement. “By combining these efforts under one roof, we gain efficiency and consistency without sacrificing effectiveness.”