The FTC recently sent its annual letter to the CFPB reporting on the FTC’s activities related to the Equal Credit Opportunity Act (ECOA) and Regulation B.  The new letter reports on the FTC’s activities in 2022.  The Bureau includes the FTC’s annual letter in its own annual report to Congress on the ECOA.


The FTC has authority to enforce the ECOA and Regulation B with respect to nonbank financial service providers within its jurisdiction.  The letter notes that, consistent with the Dodd-Frank Act, the FTC continues to coordinate certain ECOA enforcement and other activities with the CFPB pursuant to a memorandum of understanding with the Bureau.

With regard to fair lending enforcement, the letter highlights the settlements in two FTC enforcement actions against two groups of auto dealerships, Passport Automotive Group and Napleton Auto Group, in which the FTC alleged the dealerships violated the ECOA and Regulation B by discriminating against Black consumers (and, in the case of Passport, also Latino consumers), charging them higher financing costs and fees.  The FTC’s lawsuit against Napleton was filed jointly with the Illinois Attorney General.  In its lawsuit against Passport, the FTC alleged that the alleged discriminatory conduct also constituted unfair discrimination in violation of Section 5 of the FTC Act.

With regard to fair lending research and policy development, the letter discusses (1) a report to Congress issued by the FTC in 2022 that discussed risks arising from the use of artificial intelligence by big tech platforms and other users, including the risk that AI can result in discrimination against protected classes of individuals; (2) a conference co-hosted by the FTC in 2022 that included a discussion on designing compensation in the auto loan market and concerns arising from discretionary markups; (3) the FTC staff’s continuation of its work as a liaison to the American Bar Association’s Standing Committee on Legal Assistance for Military Personnel which supports initiatives to deliver legal assistance and services to servicemembers, veterans, and their families, and (4) the FTC’s continuation of its (a) service as a member of the Interagency Task Force on Fair Lending along with the CFPB, DOJ, HUD and the federal banking agencies, and (b) participation in the Interagency Fair Lending Methodologies Working Group which consists of staff members from the FTC, CFPB, DOJ, HUD, federal banking agencies, and the Federal Housing Finance Agency.

With regard to fair lending consumer and business education, the letter discusses the FTC’s “efforts to provide education on significant issues to which Regulation B pertains.”  The efforts described consist of guidance for consumers on credit discrimination, data released by the FTC on harm to people living in majority Black communities arising from fraud and other consumer problems, alerts to consumers about the 2022 auto dealer enforcement cases, and guidance to business on the settlements in those cases.

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